Laughing Water Capital, an investment management company, released its third-quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund fell approximately 11.6%, which makes YTD returns ~8.3% compared to the SP500TR and the R2000 returns of -3.3% and -5.1%, respectively, during the quarter and 13.1% and 2.5% YTD, respectively. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Laughing Water Capital highlighted stocks like Avid Bioservices, Inc. (NASDAQ:CDMO) in the third quarter 2023 investor letter. Headquartered in Tustin, California, Avid Bioservices, Inc. (NASDAQ:CDMO) is a contract development and manufacturing organization. On October 23, 2023, Avid Bioservices, Inc. (NASDAQ:CDMO) stock closed at $7.10 per share. One-month return of Avid Bioservices, Inc. (NASDAQ:CDMO) was -29.07%, and its shares lost 57.54% of their value over the last 52 weeks. Avid Bioservices, Inc. (NASDAQ:CDMO) has a market capitalization of $448.102 million.
Laughing Water Capital made the following comment about Avid Bioservices, Inc. (NASDAQ:CDMO) in its Q3 2023 investor letter:
“In my view, the most important question is not what will happen next with interest rates or inflation or recession. The most important question for investment success is how able you are to take mark to market fluctuations. The headlines are scary, and with the exception of a few anointed mega cap stocks, fear has returned to the market. But in most cases I struggle to see impairment of the intrinsic value of our investments if you simply look past the horizon.
For example, take our investment in Avid Bioservices, Inc. (NASDAQ:CDMO), our biologic contract drug manufacturer, which has been cut in half over the last few months after issuing disappointing near-term guidance tied to a slow down in biotech spending on early-stage projects. The near term is admittedly uncertain, but the bigger picture remains unchanged. There is still a very favorable de novo biologic drug pipeline, still a very favorable patent cliff/biosimilar pipeline, still a very favorable industry supply vs. demand dynamic, still a very favorable trend toward outsourcing among large pharma, and still very favorable forecasts from existing large customers.
Further, simply zooming out a little bit shows that after a few years of cash going out the door to fund capacity expansion, Avid is now at a pivot point, and cash should shortly be coming in the door as that capacity has been built. That cash will come with tremendous operating leverage…” (Click here to read the full text)
A biotechnology laboratory with several scientists in white coats studying a microscope. Editorial photo for a financial news article. 8k. –ar 16:9
Avid Bioservices, Inc. (NASDAQ:CDMO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 11 hedge fund portfolios held Avid Bioservices, Inc. (NASDAQ:CDMO) at the end of second quarter which was 13 in the previous quarter.
We discussed Avid Bioservices, Inc. (NASDAQ:CDMO) in another article and shared the list of most undervalued biotech stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
