Laughing Water Capital, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. For Q2 2022 Class A interests in Laughing Water Capital returned approximately -19.4%, bringing our year-to-date returns to approximately -29.5%. The SP500 and R2000 returned -16.1% and -17.2% for the quarter, bringing year-to-date returns to -20.0% and -23.4% respectively. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Laughing Water Capital mentioned Thryv Holdings, Inc. (NASDAQ:THRY) and explained its insights for the company. Founded in 2013, Thryv Holdings, Inc. (NASDAQ:THRY) is a Grapevine, Texas-based publicly-traded software with a $949.4 million market capitalization. Thryv Holdings, Inc. (NASDAQ:THRY) delivered a -32.97% return since the beginning of the year, while its 12-month returns are down by -11.78%. The stock closed at $27.57 per share on August 19, 2022.
Here is what Laughing Water Capital has to say about Thryv Holdings, Inc. (NASDAQ:THRY) in its Q2 2022 investor letter:
“Thryv is our small business software company that is milking the cash flows from the legacy yellow pages business. Shares have sold off perhaps because all things SAAS have been punished, and perhaps because this business has exposure to small and medium businesses, which will presumably be challenged in a recessionary environment. At the same time, I do not think the trend of small businesses moving to the cloud is at risk, and Thryv’s product replaces labor by automating many tasks, and thus likely actually saves its customer’s money which may accelerate adoption in a recessionary environment.
Most importantly however, Thryv’s software business is fully scaled, and was previously cash flowing before management elected to increase growth spending. In a more challenged economic environment, management could simply flip the switch back to focus on cash flow. The team here is excellent, having navigated through many challenging economic cycles over the last 30 years, they have a lot of skin in the game, and they understand that at the end of the day cash flow is king.
Earlier this year they laid out a plan to ~5x the business over the next 5 years, and then 4x the business in the 5 years after that. These are clearly ambitious plans, but given the undemanding valuation, they could fall well short and we would still be rewarded. It is worth noting that they did not suggest that this growth would come in a straight line, and I would be shocked if they did not plan for many speedbumps along the way.”
Photo by Danial Igdery on Unsplash
Our calculations show that Thryv Holdings, Inc. (NASDAQ:THRY) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Thryv Holdings, Inc. (NASDAQ:THRY) was in 20 hedge fund portfolios at the end of the second quarter of 2022, compared to 13 funds in the previous quarter. Thryv Holdings, Inc. (NASDAQ:THRY) delivered a 12.62% return in the past 3 months.
In April 2022, we also shared another hedge fund’s views on Thryv Holdings, Inc. (NASDAQ:THRY) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
