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Soumya Eswaran
Fri, June 12, 2026 astatine 10:28 AM CDT 3 min read
Madison Small Cap Fund, managed by Madison Funds, released its Q1 2026 capitalist letter. A transcript of the missive is disposable to download here. The Madison Small Cap Fund (class I) accrued by 0.10% successful the archetypal quarter, trailing down the Russell 2000 Index (up 0.89%) and the Russell 2500 Index (up 2.04%). Despite somewhat underperforming the benchmark successful the quarter, halfway positions and IT investments showed coagulated performance. From a benignant perspective, worth stocks outperformed growth, with the Russell 2000 Value Index rising ~4.5% and the Russell 2000 Growth Index falling astir 3%. The outperformance of the worth is driven by weakness successful speculative names aligning with the Fund's benignant and penchant for quality, profitable franchises. The Fund believes the marketplace volatility, influenced by AI concerns and geopolitical tensions, presents a imaginable accidental for diligent investors. Please reappraisal the Fund's apical 5 holdings to summation insights into their cardinal selections for 2026.
In its first-quarter 2026 capitalist letter, Madison Small Cap Fund Strategy highlighted Matador Resources Company (NYSE:MTDR). Matador Resources Company (NYSE:MTDR) is simply a US-based autarkic vigor institution engages successful the acquisition, exploration, development, and accumulation of lipid and earthy state resources. On June 11, 2026, Matador Resources Company (NYSE:MTDR) closed astatine $53.62 per share. One-month instrumentality of Matador Resources Company (NYSE:MTDR) was -11.14%, and its shares gained 3.83% implicit the past 52 weeks. Matador Resources Company (NYSE:MTDR) has a marketplace capitalization of $6.66 billion.
Madison Small Cap Fund stated the pursuing regarding Matador Resources Company (NYSE:MTDR) successful its Q1 2026 capitalist letter:
"Matador Resources Company (NYSE:MTDR) is simply a Delaware Basin Exploration and Production (E&P) institution founded successful 2003. The midstream plus is simply a associated task that moves oil, gas, and h2o successful and retired of the Permian Basin. Production has grown 28% per annum since its Initial Public Offering (IPO). Matador has an entrepreneurial civilization and a precocious level of worker ownership, with its CEO and founder, Joe Foran, personally owning ~4% of the shares. The institution is an innovator successful drilling plan and has fantabulous well-based economics. The institution besides has Delaware-focused midstream assets, which person increasing worth arsenic state and h2o cuts summation successful the basin.
MTDR trades astatine 3.3x endeavor worth to net earlier interest, taxes, depreciation, and amortization (EV/EBITDA), and sub-3x if we see the midstream assets, a discount to its peers and our comp group. MTDR besides trades astatine 9.8x net versus 15x for the group. We presumption this arsenic compelling fixed the hidden midstream plus and the premium quality of MTDR's acreage. Our intrinsic worth estimation of $95 is based connected 5x EV/EBITDA, supported by expanding escaped currency travel yield."
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