Greenhaven Road Capital, an investment management firm, published its first quarter 2021 investor letter – a copy of which can be downloaded here. A commendable net return of 14% was recorded by the fund for the Q1 of 2021, outperforming the S&P 500 Index that delivered a 6.17% return for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Greenhaven Road Capital, in their Q1 2021 investor letter, mentioned PAR Technology Corporation (NYSE: PAR), and shared their insights on the company. PAR Technology Corporation is a New Hartford, New York-based global technology conglomerate that currently has a $2 billion market capitalization. Since the beginning of the year, PAR delivered a 30.37% return, extending its 12-month gains to 374.55%. As of April 30, 2021, the stock closed at $82.14 per share.
Here is what Greenhaven Road Capital has to say about PAR Technology Corporation in their Q1 2021 investor letter:
“PAR Technology (PAR) – After the first quarter ended, PAR announced a long-anticipated acquisition of Punchh (yes, that spelling is correct), a complimentary software product for restaurant loyalty programs. This is another step in the direction of providing a comprehensive platform for restaurant chains, which currently use a suite of individual point solutions that interface into the point-of-sale system (POS) with varying degrees of fidelity. With the Punchh acquisition, PAR will have their Brink POS system, an inventory management system, a loyalty system, and a payments system, which all will become tightly integrated over time. The transaction included a $160 million investment from Panera Bread founder Ron Shaich’s Act III Holdings. His colleague will join the board and he will join as an observer. There may be more informed investors in the restaurant technology space, but I am not aware of them. An investment from Ron Shaich is a large vote of confidence. People build businesses, and it is wonderful to have Ron commit so much capital and come on board.
PAR remains a company that will not screen well. The financials are distorted by a legacy defense contracting business and a lumpy hardware business. The backlog of restaurant locations to be installed does not appear on their balance sheet nor do the cross-selling opportunities created by the Restaurant Magic and Punchh acquisitions. The uplift the company will receive from layering in high-margin payments revenue on top of existing and new customers does not yet appear on the income statement, nor does the potential to increase price. If PAR is successful in building a comprehensive omnichannel solution to run a modern restaurant, managing everything from coordinating the kitchen to remembering guest preferences, they will have pricing power. PAR is strengthening their team, board, and product offering while selling into an improving market that needs their solutions – I like the set-up and bought more, even with the increase in share price.”
Our calculations show that PAR Technology Corporation (NYSE: PAR) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, PAR Technology Corporation was in 19 hedge fund portfolios, compared to 12 funds in the third quarter. PAR delivered a 19.92% return in the past 3 months.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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Disclosure: None. This article is originally published at Insider Monkey.
