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 NextNav Inc. (NASDAQ:NN), in the second quarter 2024 investor letter. NextNav Inc. (NASDAQ:NN) provides next generation positioning, navigation, and timing (PNT) solutions. The one-month return of NextNav Inc. (NASDAQ:NN) was 2.53%, and its shares gained 175.42% of their value over the last 52 weeks. On July 25, 2024, NextNav Inc. (NASDAQ:NN) stock closed at $8.18 per share with a market capitalization of $1.002 billion.
Laughing Water Capital stated the following regarding NextNav Inc. (NASDAQ:NN) in its Q2 2024 investor letter:
“NextNav Inc. (NASDAQ:NN) – Nextnav is our owner of wireless spectrum that is building a next-gen GPS system which is presently not economically viable. In April, Nextnav filed a petition with the FCC asking to swap their existing owned spectrum for similar but contiguous spectrum, and then to repurpose this spectrum for use with 5G. This 5G spectrum could then be monetized by some sort of partnership or lease agreement. It is impossible to handicap how this process will play out, but examining the pieces on the chess board suggests that it is highly likely that Nextnav’s petition will be granted in one way or another in the not-too-distant future.
In brief, the present GPS system has serious shortcomings. This has been known for years, but has become a higher priority issue as the conflicts in Ukraine and Israel/Gaza have demonstrated that the existing, satellite-based GPS system can be easily hacked, spoofed, or otherwise tricked. Additionally, it is no secret that Russia and China have been developing “satellite killing” missiles that could destroy the global GPS system – or that part of it covering the U.S. – in a conflict. The GPS system is not only responsible for powering Waze and other apps that make daily driving easier. It also powers the clocks that tie together the power grid and the financial system, allows for precision agriculture and weather forecasting, and is the backbone of emergency response systems. Essentially, every agency that relies on GPS is anxious to see the development of a backup system, but – unsurprisingly – none of these agencies want to pay for this system…” (Click here to read the full text)
A woman talking on her cellular phone, with a map of a metropolitan area in the background.
NextNav Inc. (NASDAQ:NN) is not on our list of 31 Most Popular Stocks Among Hedge Funds. NextNav Inc. (NASDAQ:NN) was held by 14 hedge fund portfolios at the end of the first quarter, compared to 16 in the previous quarter, according to our database. NextNav Inc. (NASDAQ:NN) reported first-quarter revenue of $1 million compared to $830,000 in Q1 2023. The year-over-year increase was due to a rise in recurring service revenue from technology and services contracts. While we acknowledge the potential of NextNav Inc. (NASDAQ:NN) 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 NextNav Inc. (NASDAQ:NN) 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.
