Laughing Water Capital, an investment management company, released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, Class A interests in Laughing Water Capital returned about 18.6% bringing year-to-date returns to approximately 39.5%. The SP500TR and R2000 returned 2.4% and 0.3% in the quarter and 25% and 11.5% year-to-date, respectively. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Laughing Water Capital highlighted stocks like Lifecore Biomedical, Inc. (NASDAQ:LFCR) in the fourth quarter 2024 investor letter. Lifecore Biomedical, Inc. (NASDAQ:LFCR) is an integrated contract development and manufacturing organization. The one-month return of Lifecore Biomedical, Inc. (NASDAQ:LFCR) was -13.68%, and its shares gained 6.49% of their value over the last 52 weeks. On January 21, 2025, Lifecore Biomedical, Inc. (NASDAQ:LFCR) stock closed at $6.56 per share with a market capitalization of $242.89 million.
Laughing Water Capital stated the following regarding Lifecore Biomedical, Inc. (NASDAQ:LFCR) in its Q4 2024 investor letter:
“Lifecore Biomedical, Inc. (NASDAQ:LFCR) – Lifecore, our CDMO focused on injectable drugs, had a busy year as a new – and much improved – management team began to put their stamp on the business. Notably, we participated in an equity raise which helped remove balance sheet concerns, and the Company hosted an investor day that provided more detail on the plan to reach $300M of annual revenue by filling spare capacity. Of particular interest is a step up in contractually guaranteed revenue by 2027. The Company has also been building out their sales force, and all of this additional revenue will come with tremendous operating leverage on the Company’s fixed costs. This is great news looking forward, but rewind to what the old management team said two years ago, and it seems as if the previous management team either misled investors or had a very poor handle on their business, which is of course frustrating.
Lifecore is now the last remaining small public CDMO, and in their most recent 10Q they indicated that internally they believe there is an 80% chance there will be a change of control event by 2028. Now that a new management team has arrived and is cleaning up – and growing – the business, I personally think the odds are higher. Examining comparable transaction multiples suggests that Lifecore could have more than 100% upside today, and significantly more upside in the future as management executes vs. the plan. Presumably management shares this view as they have recently bought shares in the open market.”
A village pharmacist fulfilling a patient’s medication prescription in a rural area.
Lifecore Biomedical, Inc. (NASDAQ:LFCR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held Lifecore Biomedical, Inc. (NASDAQ:LFCR) at the end of the third quarter which was 12 in the previous quarter. In the fiscal second quarter of 2025, Lifecore Biomedical, Inc. (NASDAQ:LFCR) generated $32.6 million in revenues compared to $30.2 million for the comparable 2024 period. While we acknowledge the potential of Lifecore Biomedical, Inc. (NASDAQ:LFCR) 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.
We previously discussed Lifecore Biomedical, Inc. (NASDAQ:LFCR) in another article, where we shared Arquitos Capital Management’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q4 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.