Riverwater Partners’ Sustainable Value Strategy underperformed the Russell 2500 Value Index in the third quarter of 2026, mainly because artificial-intelligence and data-center holdings declined, although Health Care stock selection partly offset weakness in Technology and Energy. The strategy reduced semiconductor exposure and added Lineage, Birkenstock, Matador Resources, KBR and ICON. Haemonetics was the top contributor, returning 40% after CSL returned as a customer, while Riverwater added to Knight-Swift following a solid earnings beat and conservative guidance. Riverwater said cold-storage indicators suggested a possible cycle turn at Lineage, trucking appeared early in a cyclical recovery, and KBR offered potential value through its planned business separation, Saudi licensing activity, sustainability exposure and sum-of-the-parts valuation. It sold most of its Century Aluminum position after August Canadian tariff headlines and said small-cap stocks could have an encouraging setup despite continued uncertainty.