In the first quarter of 2026, the Wasatch Long/Short Alpha Fund, under the management of Wasatch Global Advisors, released its investor letter, which is accessible for download. This period saw a shift in investor sentiment, leading to increased volatility and market corrections in small- and mid-cap U.S. equities. However, the ongoing enthusiasm for artificial intelligence continued to bolster companies involved in infrastructure development. The quarter's dynamics were further complicated by the conflict in Iran, prompting investors to consider the broader economic implications of potential oil price increases. Amidst these conditions, the Russell 2500 Index posted a 2.04% return, while the Wasatch Long/Short Alpha Fund's Investor Class surpassed this with a 4.16% increase, primarily due to the strong performance of its short positions.

The Wasatch Long/Short Alpha Fund specifically highlighted Casella Waste Systems, Inc. (CWST) in its Q1 2026 investor letter. Casella Waste Systems is a comprehensive solid waste services company, offering expertise and services in resource management. As of June 2, 2026, CWST shares closed at $83.00, having experienced a -5.28% return over the past month and a 29.12% decline over the last 52 weeks, with a market capitalization of $5.28 billion. Despite a recent dip in its stock price and a slight decrease in profitability, the fund expressed continued confidence in Casella's core business and its management team, citing a consistent history of successful acquisitions.

Casella Waste Systems, Inc. is not among the top 40 most popular stocks among hedge funds as of the end of the first quarter, with 28 hedge fund portfolios holding positions, consistent with the previous quarter. The company reported a 9.6% year-over-year revenue increase to $457.3 million in Q1 2026. While recognizing Casella Waste Systems' investment potential, the Wasatch Long/Short Alpha Fund suggests that certain AI stocks may offer more significant upside with reduced downside risk, particularly for those seeking undervalued opportunities benefiting from trade policies and domestic production trends.

Investing wisely requires a thorough understanding of market dynamics and the fundamental strengths of companies. Casella Waste Systems exemplifies a business with a solid foundation and a management team capable of navigating challenging economic landscapes. While market sentiment can cause fluctuations, long-term success often comes from identifying and supporting companies with intrinsic value and strategic growth potential. This approach encourages resilience and foresight in financial planning.