Riverwater Says Missing SanDisk Cost Its Small-Cap Strategy

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Summary · why it matters

Riverwater Partners said the absence of SanDisk from its Sustainable Value Strategy drove its second-quarter underperformance, as the NAND flash maker powered the Russell 2500 Value Index's best first-half run since 1991. In its Q2 2026 investor letter, the firm noted the Russell 2500 Value Index rose 17% and that SanDisk, spun off from Western Digital in February 2025, gained roughly 720% year to date and about 4,000% over the trailing twelve months. At its peak the stock comprised nearly 5% of the index and accounted for an estimated 6% of the index's year-to-date 2026 return, all from a single stock. Riverwater said it avoided SanDisk because memory semiconductors remain a cyclical commodity business where producers are price-takers, and because the company exceeded its market capitalization threshold, starting the year above $40 billion and surging past $250 billion by the time it was reconstituted out of the index at the end of the quarter. SanDisk closed at $1,791.82 per share on September 18, 2026, with a market capitalization of $262.35 billion and a 52-week range of $90.22 to $2,354.39.

Impact on assets 2

Semiconductors▲ · 1 stocks
Sandisk Corp
SNDK
▲ PositiveDemandrelevance

SanDisk's NAND flash stock gained ~720% YTD and drove the Russell 2500 Value Index's best first-half run since 1991, reflecting strong end-market demand for its memory products.

Cloud & Digital Infrastructure▲ · 1 stocks

Off-coverage companies 1

Riverwater PartnersPrivate▼ Negative
Capitalrelevance

Riverwater Partners said its Sustainable Value Strategy underperformed in Q2 because it avoided SanDisk, missing the index's top contributor.

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