Novanta Stock Has Underperformed This Past Year, but One Investor Just Made a $36 Million Bet on Shares

By Jonathan Ponciano – Mar 4, 2026 at 9:45AM ESTKey PointsHarvey Partners bought 304,000 shares of Novanta in the fourth quarter.The quarter-end position value increased by $36.17 million as a result.The new holding places Novanta outside the fund's top five positions.On February 17, 2026, Harvey Partners disclosed a new position in Novanta (NOVT +0.84%), acquiring 304,000 shares worth $36.17 million.What happenedAccording to a Securities and Exchange Commission (SEC) filing dated February 17, 2026, Harvey Partners reported a new position in Novanta, acquiring 304,000 shares during the quarter. The quarter-end value of the stake was $36.17 million, reflecting both the acquisition and any stock price changes afterward.What else to knowThis is a new position for the fund, now accounting for 3.21% of 13F reportable assets under management (AUM).Top holdings after the filing:NYSE: NPO: $53.4 million (4.8% of AUM)NASDAQ: GLDD: $48.6 million (4.4% of AUM)NASDAQ: MKSI: $46.2 million (4.1% of AUM)NASDAQ: ADEA: $45.1 million (4.1% of AUM)NASDAQ: LASR: $45.1 million (4.1% of AUM)As of February 17, 2026, shares of Novanta were priced at $145.37 roughly flat over the past year and well underperforming the S&P 500’s roughly 16% gain in the same period.Company overviewMetricValuePrice (as of market close February 17, 2026)$145.37Market capitalization$5 billionRevenue (TTM)$980.6 millionNet income (TTM)$53.8 millionCompany snapshotNovanta provides photonics, vision, and precision motion components and sub-systems, including laser scanning, beam delivery, medical visualization, and motion control solutions.The company generates revenue by designing, manufacturing, and selling specialized hardware and equipment to original equipment manufacturers, primarily through direct sales, resellers, and distributors.Primary customers are original equipment manufacturers in the medical and industrial sectors worldwide, seeking advanced technology for imaging, diagnostics, and precision automation.Novanta operates at scale with a global footprint, specializing in high-precision technology solutions for demanding medical and industrial applications. The company's strategy focuses on innovation in photonics and motion control, leveraging a diversified product portfolio and established brands to address complex customer needs. Novanta's competitive edge lies in its deep engineering expertise and ability to serve OEMs with mission-critical components and subsystems.What this transaction means for investorsNovanta stock has been roughly flat over the past year at about $145, badly trailing the broader market as margins suffered despite continued demand from medical OEMs, where photonics, vision, and motion control components are deeply embedded in surgical systems and diagnostics equipment.Novanta closed 2025 with revenue of $980.6.3 million, up about 3% year over year, but operating income fell to $94 million from $110.6 million in 2024, and net income also fell from $64.1 million to $53.8 million. Nevertheless, the firm exceeded revenue expectations in the quarter and delivered a return to organic growth. CEO Matthijs Glastra said Novanta plans to improve margins and cash flow this year.Within a portfolio that already includes automation, laser and industrial technology names, this 3% allocation looks intentional. It reinforces a thesis around mission-critical subsystems rather than headline-grabbing finished products. For long-term investors, the question is whether Novanta can actually improve margins and cash flow even if capital spending cycles wobble. If it can, today’s multiple may not look stretched at all.About the AuthorJonathan Ponciano is a contributing stock market analyst at The Motley Fool. He has nearly a decade of experience as a financial journalist, most recently as an editor and senior reporter at Forbes focused on markets, technology, and entrepreneurship. Jonathan has also written for Investopedia and the Los Angeles Business Journal. He holds a dual B.A. in Business Journalism and Economics from the University of North Carolina at Chapel Hill and an M.B.A. from Columbia Business School. A North Carolina native now based in New York City, Jonathan has also lived in Mexico City and Los Angeles.CMFjonponcStocks MentionedNovantaNASDAQ: NOVT$139.34(+0.84%)+$1.16*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.