This Fund Exited a $5 Million DNOW Stake Last Quarter. The Stock Has Fallen 12% This Year
Key Points
Quantedge reduced its stake in DNOW by 351,310 shares in the fourth quarter.
The quarter-end position value dropped by $5.36 million.
The move marked a full exit from DNOW; the stake previously accounted for 2.9% of the fund’s AUM.
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On February 17, 2026, Quantedge Capital reported selling out of DNOW (NYSE:DNOW), unloading 351,310 shares previously worth $5.36 million.
What happened
According to a Securities and Exchange Commission (SEC) filing dated February 17, 2026, Quantedge Capital reported a complete sale of its 351,310-share position in DNOW. The quarter-end position value for DNOW declined by $5.36 million as a result.
What else to know
- Quantedge Capital sold out its DNOW stake, which previously represented 2.9% of AUM.
- Top holdings after the filing:
- NYSE:PVH: $31.50 million (15.0% of AUM)
- NYSE:HLF: $29.00 million (13.8% of AUM)
- NYSE:BWA: $16.37 million (7.8% of AUM)
- NYSE:ADNT: $14.73 million (7.0% of AUM)
- NYSE:YELP: $7.31 million (3.5% of AUM)
- As of Monday, shares of DNOW were priced at $11.79, down about 27% over the past year and significantly underperforming the S&P 500, which is instead up about 15% in the same period.
Company overview
| Metric | Value |
|---|---|
| Price (as of Monday) | $11.79 |
| Market capitalization | $2.2 billion |
| Revenue (TTM) | $2.8 billion |
| Net income (TTM) | $89 million |
Company snapshot
- DNOW offers a broad portfolio of energy and industrial products, including pipes, valves, fittings, instrumentation, safety supplies, and original equipment for downstream, midstream, and upstream sectors.
- The company generates revenue primarily through the distribution of maintenance, repair, and operating supplies, as well as supply chain and materials management solutions for energy and industrial clients.
- It serves a diversified customer base comprising drilling contractors, oil and gas companies, refineries, petrochemical and chemical processors, utilities, and industrial manufacturers across the United States, Canada, and international markets.
DNOW is a leading distributor of energy and industrial products, leveraging an extensive network of locations to support customers across the energy value chain. The company’s strategy centers on delivering integrated supply chain solutions and value-added services tailored to the operational needs of major industry players. Its scale, product breadth, and established customer relationships provide a competitive advantage in the oil and gas equipment and services sector.
What this transaction means for investors
DNOW is a bit of a mixed bag right now. On one hand, it’s a real business with scale, pulling in about $2.8 billion in revenue last year and generating over $200 million in adjusted EBITDA. But the company still posted a net loss of $89 million, largely tied to deal-related costs and integration issues after the MRC Global acquisition. And the market seems to be focusing more on those headaches than the long-term upside. The stock has been weak over the past year and is already down 12% in 2026, which suggests investors aren’t fully buying the turnaround story yet.
All of this makes Quantedge’s exit look pretty well-timed. In a statement alongside earnings, CEO David Cherechinsky pointed to the firm’s fifth consecutive year of revenue growth and highest adjusted EBITDA on record, but he acknowledged the challenges related to the U.S. MRC Global ERP system transition that went live in the third quarter. “While these complexities have created near-term obstacles, we are actively addressing them and remain focused on positioning the business for long-term growth,” he added.
When you compare this to the rest of Quantedge’s portfolio, which leans more toward steadier, cash-generating names, DNOW sticks out as higher risk. It’s tied to energy cycles and now has added execution risk on top. That all makes it a little clearer why the fund might have wanted to step out when it did.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends BorgWarner. The Motley Fool has a disclosure policy.
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