Latham Group Faces Market Retreat Amidst Housing Sector Downturn
McIntyre Partnerships experienced a challenging start to 2026, with its portfolio seeing a notable decline. This downturn was primarily attributed to underperforming investments in life science tools and medical device companies, as well as specific challenges faced by Latham Group. Despite these short-term setbacks, the fund's long-term performance continues to outpace its benchmark.
Investment Firm Reports Q1 2026 Losses, Highlights Latham Group's Performance
In the initial quarter of 2026, the investment firm McIntyre Partnerships, headquartered in the United States, reported a gross return of -19% and a net return of -20%. This contrasted sharply with the Russell 2000 Value Index's 5% return over the same period. The fund's performance since its establishment remains strong, with an annual gross return of approximately 14% and a net return of about 10%, comfortably exceeding the benchmark's roughly 7% yearly return.
The primary causes for the disappointing first-quarter results were identified as substantial drops in the value of life science tools and medical device stocks, areas where the fund holds significant investments. Furthermore, specific issues related to QDEL, a company within the life science tools sector, contributed to these losses. As the quarter concluded, McIntyre Partnerships' market exposure was recorded at 123% long, 27% short, leading to a net exposure of 97%.
Latham Group, Inc. (NASDAQ: SWIM), a prominent manufacturer of residential swimming pools with operations spanning North America, Australia, and New Zealand, was highlighted in McIntyre Partnerships' Q1 2026 investor letter. On June 1, 2026, Latham Group's shares closed at $5.32. The company experienced a -9.22% return over the preceding month, and its shares had fallen by 12.79% over the past 52 weeks, resulting in a market capitalization of $624.63 million.
McIntyre Partnerships noted that Latham Group's stock, along with other housing-related equities, retreated as escalating oil prices, fueled by the Iran conflict, dampened prospects for further interest rate reductions. This geopolitical development has cast a shadow on the housing market's outlook, directly impacting companies like Latham Group.
Despite Latham Group's presence in McIntyre Partnerships' portfolio, it is not included in the list of the 40 most popular stocks among hedge funds as of the end of the first quarter. Data indicates that 23 hedge fund portfolios held Latham Group shares, a decrease from 27 in the previous quarter. While acknowledging Latham Group's potential as an investment, McIntyre Partnerships suggests that certain AI stocks may offer higher upside potential with reduced downside risk.
This quarter's results underscore the volatility inherent in market investments, particularly in sectors sensitive to global events and economic shifts. For investors, it reinforces the importance of diversified portfolios and strategic re-evaluations in response to evolving market conditions. The performance of Latham Group also serves as a reminder of how external factors, such as geopolitical tensions and commodity prices, can ripple through various industries, impacting corporate valuations and investor sentiment.