Greenhaven Road Capital, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. The fund returned approximately -9% net for the fourth quarter, bringing the full-year net return to approximately 3%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Greenhaven Road Capital, in its Q4 2021 investor letter, mentioned PAR Technology Corporation (NYSE: PAR) and discussed its stance on the firm. PAR Technology Corporation is a New Hartford, New York-based systems and service solutions provider with a $1 billion market capitalization. PAR delivered a -28.94% return since the beginning of the year, while its 12-month returns are down by -45.55%. The stock closed at $37.50 per share on January 31, 2022.
Here is what Greenhaven Road Capital has to say about PAR Technology Corporation in its Q4 2021 investor letter:
“PAR Technology (PAR) – In previous letters, I have written about the importance of the people at PAR, and this investment being a “jockey bet.” Fortunately, it is becoming a jockeys bet as CEO Savneet Singh has continued to attract talent, including a head of M&A from 3G, a CTO that used to run Salesforce’s marketing cloud software, and long-time Panera CEO Ron Shaich, who has made a sizable personal investment in PAR. The combination of talent and secular tailwinds set the company up well for success. I believe that the company should be able to grow software revenues substantially even if they do not sign up another large chain (I suspect they will sign up several). There is significant embedded growth to be realized from revenue contracted but not yet live for their loyalty division (Punchh), cross-selling, and penetrating franchise locations that have not yet adopted the Brink POS system.
PAR has substantial cross-selling opportunities. As with Digital Turbine, there is a very long runway for growth that does not require acquisitions or significant capital expenditures. The company has three primary products for enterprise restaurants – a POS system, a back-office management system, and a loyalty system – which should work best when used in combination rather than individually. The Brink POS system sells for roughly $2,000 per year, back office for $1,500 per year, and loyalty for $1,000 per year. Because these divisions were brought together through acquisitions, there is limited overlap in their customer bases so far. As existing products are sold to additional existing customers, growth will ensue. The company is in the process of launching a fourth product, payments, that will add another $2,000 per year of very high margin revenue per location that adopts it. In aggregate, if a customer uses all of the modules (POS, back office, loyalty, and payments), the revenue per location will exceed $6,500, more than 3X what was possible three years ago…” (Click here to see the full text)
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Our calculations show that PAR Technology Corporation (NYSE: PAR) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. PAR was in 23 hedge fund portfolios at the end of the third quarter of 2021, compared to 17 funds in the previous quarter. PAR Technology Corporation (NYSE: PAR) delivered a -43.55% return in the past 3 months.
In November 2021, we also shared another hedge fund’s views on PAR in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
