Why Dana (DAN) Was a Q2 Detractor for Gabelli Small Cap Growth Fund

Gabelli Investment Management Firm recently released its "Small Cap Growth Fund" second-quarter 2026 investor letter. A copy of the letter can be downloaded here. The Fund returned 14.44% in the second quarter of 2026, underperforming the Russell 2000 Index, which gained 21.49%, as well as the S&P SmallCap 600 and Lipper Small-Cap Core Funds Average. The Fund's performance reflected weaker relative results despite gains across several portfolio holdings, while the broader small-cap market delivered a particularly strong quarter. The Fund remains focused on identifying smaller companies with attractive long-term growth potential, with its investment approach centered on fundamental research and opportunities where the market price does not fully reflect the underlying value of a business. The Fund had $1.9 billion in net assets at quarter-end and has generated a 12.18% annualized return since inception, underscoring its long-term focus despite shorter-term periods of relative underperformance. In addition, please check the Fund's top five holdings to know its best picks in 2026.

In its second-quarter 2026 investor letter, Gabelli Small Cap Growth Fund highlighted stocks like Dana Inc. (NYSE:DAN). Dana Inc. specializes in designing and manufacturing propulsion and energy-management solutions for vehicles and machines across global mobility markets. Its technologies include drive systems, electrodynamic technologies, sealing solutions, thermal-management technologies, and digital solutions. The one-month return of Dana Inc. (NYSE:DAN) was 0.30% while its shares traded between $17.74 and $39.56 over the last 52 weeks. On September 21, 2026, Dana Inc. (NYSE:DAN) stock closed at approximately $29.99 per share, with a market capitalization of about $3.25 billion.

Gabelli Small Cap Growth Fund stated the following regarding Dana Inc. (NYSE:DAN) in its Q2 2026 investor letter:

"Dana Inc. (NYSE:DAN) specializes in designing and manufacturing propulsion and energy-management solutions that power vehicles and machines in all mobility markets across the globe (Click Here To Read The Letter In Detail)."

Dana Inc. (NYSE:DAN) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 41 hedge fund portfolios held Dana Inc. (NYSE:DAN) at the end of the first quarter, which was 32 in the previous quarter. While we acknowledge the risk and potential of Dana Inc. (NYSE:DAN) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.