Choice Equities Capital Management, a hedge fund manager, released its fourth-quarter 2023 investor letter recently. You can view it here. In the fourth quarter, the fund generated gains of +10.6% on a net basis bringing year-to-date net performance to +3.0% in comparison to the Russell 2000’s quarterly gain of 14.0% and YTD gain of 16.9%, and the S&P 500’s 11.7% and +26.3% gains, respectively for the quarter and YTD. Since its inception in 2017, the fund has generated an annualized gain of 13.4%, compared to 7.3% and 13.4% returns for the indexes, respectively. Stocks rose sharply in Q4 as disinflationary data prompted the Fed to halt its 40-year aggressive rate hikes. This led to a relief rally in most asset classes due to expectations of lower rates. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Choice Equities Capital Management featured stocks such as PAR Technology Corporation (NYSE:PAR) in the fourth quarter 2023 investor letter. Headquartered in New Hartford, New York, PAR Technology Corporation (NYSE:PAR) is a technology company that serves restaurants and retail industries. On February 2, 2024, PAR Technology Corporation (NYSE:PAR) stock closed at $46.08 per share. One-month return of PAR Technology Corporation (NYSE:PAR) was 10.00%, and its shares gained 24.88% of their value over the last 52 weeks. PAR Technology Corporation (NYSE:PAR) has a market capitalization of $1.302 billion.
Choice Equities Capital Management stated the following regarding PAR Technology Corporation (NYSE:PAR) in its fourth quarter 2023 investor letter:
“PAR Technology Corporation (NYSE:PAR) – Par is organized into three operating segments. The Brink business, a SAAS point-of-sale (POS) platform for quick-service restaurant operators, is the most important. Sales have been growing rapidly on the back of new customer wins and aided by acquisition with adjacent product rollouts in payments, back office, loyalty, online ordering and drive-through offerings that all connect to a restaurant’s point-of-sale (POS) operating software.
Customer wins have been accelerating, partly aided by the recent signing of Burger King’s US locations, which may be followed by international locations at some point down the road. It now looks increasingly likely that Par/Brink will be the winner-take-most player in the POS market for the large quick-service restaurant segment, with additional wins among large, scaled customers offering continued attractive growth. High margin annual recurring revenue (ARR) revenue in this segment has grown from less than $20M four years ago, to north of $150M on a run-rate basis ending this past year when factoring in domestic Burger King locations. Today, Brink generates ~$5/share of ARR on a run-rate basis and could accelerate meaningfully beyond $200M+ in 2025.
Though the company has periodically talked about a sale of its government business (a defense contractor with more than $100M in profitable sales around which the corporate entity was first built) in the past, it now seems a sale relatively soon is increasingly likely. The government business is performing well and could fetch ~$100M or more, which the company can put towards furthering their Brink growth plans. Additionally, the Brink business segment is now much farther along, and thus the company looks better positioned to move forward with the sale. A hardware business providing restaurant customers a range of terminals, portable tablets, payment devices and various hardware pieces remains, profitably contributing over a $100M in sales to the corporate entity as well.”
A busy restaurant kitchen with a chef and staff rhythmically preparing food for delivery orders.
PAR Technology Corporation (NYSE:PAR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held PAR Technology Corporation (NYSE:PAR) at the end of third quarter which was 19 in the previous quarter.
We discussed PAR Technology Corporation (NYSE:PAR) in another article and shared Baron Discovery Fund’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q4 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.
