Minot Light Posts 20.3% Net Return, Bets on Rockwell Medical

Minot Light Capital Partners generated a 26.2% gross return and a 20.3% net return in the second quarter of 2026, lifting year-to-date results to 22.8% gross and 17.1% net, according to the firm's Q2 investor letter.

The figures are striking for a fund only 21 months old. Since inception, the partnership has returned 56.4% gross and 40.9% net.

The fund credited the quarter to strength across several large positions while keeping a diversified portfolio, limited leverage, and a focus on profitable small and micro-cap companies with strong balance sheets. Minot Light also pointed to improving downside protection and upside participation as momentum-driven market trends began to weaken.

The Rockwell Medical thesis

One position stands out in the letter: Rockwell Medical, Inc. (NASDAQ:RMTI). The healthcare company develops, manufactures, commercializes, and distributes hemodialysis products for dialysis providers.

On September 21, 2026, Rockwell Medical closed at $8.70 per share. The stock gained 2.09% over one month but lost 38.44% over the trailing 52 weeks. Its market capitalization stands at $32.51 million, with a 52-week trading range between $4.89 and $13.30.

Minot Light's letter frames Rockwell as a textbook example of the firm's preferred hunting ground. The manager wrote:

"Rockwell Medical, Inc. (NASDAQ:RMTI) is another example of a type of stock that has generated good returns for Minot Light over the past 18 months. It encompasses three characteristics that provide us with a unique opportunity in areas where most institutional small-cap managers cannot or will not participate. These three characteristics are: 1. A sub-$50M market cap / sub-$25M enterprise value (market cap minus net cash on the balance sheet), 2. A stock that falls below $1.00/share, and 3. A company that announces a reverse stock split to make sure the stock goes back up above $1.00/share to ensure it is not de-listed."

Buying below net cash

The strategy, in Minot Light's telling, is straightforward: when those three conditions converge, the fund can often buy a relatively healthy company with reasonable growth prospects at or below its net cash value.

The letter cites two prior plays on the same pattern. "In previous letters we have spoken about both Outset Medical (OM) and MaxCyte (MXCT), both of which were companies where we were able to purchase shares below net cash on the balance sheet, despite core businesses with several attractive characteristics," the fund wrote.

The approach tests patience. "We will admit, these can be some of the most frustrating stocks to own in the near-term, but over time, as we have been able to lower our average cost on both names, they have made us money and eventually contributed nicely to partnership returns," the letter states.

The Rockwell position carries one feature the earlier trades lacked. "In our view, Rockwell is at least as attractive as OM and MXCT were at their lows, and potentially more so, simply because it should now be sustainably cash flow positive going forward, whereas OM and MXCT are still burning cash," the fund wrote.

Where the fund sees the broader market

Beyond single names, the letter identifies opportunity in sharp post-IPO declines among high-quality non-technology companies. Minot Light reiterated its cautious stance on expensive AI-related and speculative stocks, while staying open to emerging technology opportunities when valuations and long-term risk-reward characteristics become more attractive.

The Rockwell bet, priced at $8.70 against a $32.51 million market cap, now gives investors a live test of whether the fund's below-net-cash formula can repeat the Outset Medical and MaxCyte outcomes — this time with a business the manager expects to be sustainably cash flow positive.