This Strategy Sees Value in Methanex (MEOH) Despite a Near-Term Cash Flow Pullback

Riverwater Partners, an investment management firm, recently published its Q2 2026 Sustainable Value Strategy investor letter. The letter explains that small-cap stocks had their best first-half performance since 1991, with the Russell 2500 Value Index rising 17%, largely driven by the technology sector. However, the Sustainable Value Strategy underperformed its benchmark, primarily due to poor stock selection and the absence of SanDisk (SNDK).

Despite this, the firm remains committed to quality-focused investing and believes that Methanex Corporation (NASDAQ:MEOH) could be an undervalued investment. Methanex, a Canada-based methanol and ammonia producer, had a significant impact on the quarter due to its Titan methanol plant being indefinitely idled, which was not factored into EBITDA estimates.

The firm still sees value in Methanex's strong free cash flow margin and double-digit free cash flow yield, and believes it is undervalued based on normalized methanol pricing.