Laughing Water Capital, an investment management company, released its second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, Class A interests in Laughing Water Capital returned about 2.5% bringing year-to-date returns to 11.1%. The SP500TR and R2000 returned 4.3% and -3.3% in the second quarter and 15.3% and 1.7% year-to-date, respectively. The strength of the market is now concentrated in a small number of mega-cap stocks. The SP500’s “artificial intelligence”-related equities increased 14.7% during the second quarter, while the overall SP500 fell 1.2%. The firm does not own any of these stocks and focuses on the hidden corners of the market. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Laughing Water Capital highlighted stocks like Thryv Holdings, Inc. (NASDAQ:THRY) in the second quarter 2024 investor letter. Thryv Holdings, Inc. (NASDAQ:THRY) is a digital marketing solutions and cloud-based tools provider. The one-month return of Thryv Holdings, Inc. (NASDAQ:THRY) was 6.51%, and its shares lost 19.17% of their value over the last 52 weeks. On July 25, 2024, Thryv Holdings, Inc. (NASDAQ:THRY) stock closed at $18.98 per share with a market capitalization of $680.069 million.
Laughing Water Capital stated the following regarding Thryv Holdings, Inc. (NASDAQ:THRY) in its Q2 2024 investor letter:
“Thryv Holdings, Inc. (NASDAQ:THRY) – Thryv, our growing SMB software business that is milking its declining Marketing Services business for cash flow, grew SAAS customers 30% YoY, increased full year guidance, announced that seasoned net dollar retention improved by 300 bps, refinanced their debt on better terms, and initiated a share repurchase program during the quarter. These are all undeniably positive developments, but on the negative side of the ledger, the decline of their Marketing Services business has accelerated a touch, and shares have sold off sharply.
Last quarter under separate cover I included a longer writeup on THRY where I explained what I think is happening under the surface at THRY with the Marketing Services business and the new Marketing Center SAAS product, and how I believe the economics of Marketing Center will prove to be wildly superior to the economics of the Marketing Services business. Thus far the market not only does not care, but in fact seems to be punishing THRY for what I believe will be a positive evolution of their business.
Management has indicated that revenue from the SAAS business will eclipse revenue from the Marketing Services business around this time next year, at which point THRY should start to trade more like the software business it is than the marketing business it was. Unsurprisingly, insiders at THRY once again bought shares in the quarter.”
A businessperson using a mobile device to illustrate the use of Thryv’s end-to-end customer experience platform.
Thryv Holdings, Inc. (NASDAQ:THRY) is not on our list of 31 Most Popular Stocks Among Hedge Funds. Thryv Holdings, Inc. (NASDAQ:THRY) was held by 14 hedge fund portfolios at the end of the first quarter, compared to 14 in the previous quarter, according to our database. Thryv Holdings, Inc. (NASDAQ:THRY) delivered strong subscriber growth in the first quarter of 2024 (see the details here). While we acknowledge the potential of Thryv Holdings, Inc. (NASDAQ:THRY) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Thryv Holdings, Inc. (NASDAQ:THRY) and shared Laughing Water Capital’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 2024 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.
