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 Hilton Grand Vacations Inc. (NYSE:HGV) in the third quarter 2023 investor letter. Headquartered in Orlando, Florida, Hilton Grand Vacations Inc. (NYSE:HGV) is a timeshare company that manages vacation ownership resorts. On October 23, 2023, Hilton Grand Vacations Inc. (NYSE:HGV) stock closed at $36.44 per share. One-month return of Hilton Grand Vacations Inc. (NYSE:HGV) was -6.99%, and its shares lost 4.00% of their value over the last 52 weeks. Hilton Grand Vacations Inc. (NYSE:HGV) has a market capitalization of $4.01 billion.
Laughing Water Capital made the following comment about Hilton Grand Vacations Inc. (NYSE:HGV) in its Q3 2023 investor letter:
“Hilton Grand Vacations Inc. (NYSE:HGV) – HGV is our time share business, which is continuing to integrate the acquisition of Diamond Resorts. The thesis is that HGV oversees a nearly impossible to replicate collection of properties under an impossible to replicate brand. That brand is a huge competitive advantage because it reduces customer acquisition costs and squeezes more value out of real estate. As the Diamond acquisition is integrated, the benefits of the Hilton brand will drive earnings power higher. Additionally, the company is committed to returning capital to shareholders in the form of buybacks, with the current authorization equating to a double-digit percentage of the outstanding shares. Perception is that this is a highly cyclical business, but prior to the Financial Crisis the business grew through every previous recession, and during the Financial Crisis revenue only dipped about 3%. In addition to cyclical fears, I believe HGV is currently suffering as a result of the well-publicized wild fires that devastated much of Maui in late August. While HGV’s two Maui properties did not suffer physical damage, travel to the area was restricted. The Maui properties were responsible for ~4% of HGV’s T12M sales.
In my view this is a clear temporary problem. It is also likely a long-term positive as share price weakness is attractive to a company that is effectively a buyback machine, and HGV presently trades around 7x free cash flow.”
Hilton Grand Vacations Inc. (NYSE:HGV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held Hilton Grand Vacations Inc. (NYSE:HGV) at the end of second quarter which was 29 in the previous quarter.
We discussed Hilton Grand Vacations Inc. (NYSE:HGV) in another article and shared stock picks of a top performing hedge fund that is up 88% this year. 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.
