L1 Capital International, an investment management company, released its second quarter 2022 investor letter. A copy of the same can be downloaded here. The fund returned -10.1% net of fees in the second quarter compared to the benchmark return of -8.5%. Current macroeconomic issues and geopolitical situations affected the fund’s performance in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
L1 Capital International discussed stocks like Louisiana-Pacific Corporation (NYSE:LPX) in the second quarter investor letter. Headquartered in Nashville, Tennessee, Louisiana-Pacific Corporation (NYSE:LPX) is a building construction material manufacturer. On September 6, 2022, Louisiana-Pacific Corporation (NYSE:LPX) stock closed at $53.10 per share. Louisiana-Pacific Corporation (NYSE:LPX) had a return of -7.60% for the past month and its shares lost 16.30% of their value in the last 52 weeks. Louisiana-Pacific Corporation (NYSE:LPX) has a market capitalization of $3.923 billion.
Here is what L1 Capital International specifically said about Louisiana-Pacific Corporation (NYSE:LPX) in its Q2 2022 investor letter:
“We have invested in Louisiana-Pacific Corporation (NYSE:LPX) due to its Smartside siding business. Smartside has consistently increased its share of the siding market in the U.S., not just new residential construction but repair and renovation, shed and other markets. Louisiana Pacific has not been able to keep up with demand for Smartside and is sold out to the end of 2022. New capacity is being added currently which will support future growth.
Between 2015 to 2022, Smartside EBITDA increased from around US$100 million to a run-rate approaching US$400 million. We believe Smartside has many years of strongly profitable growth to come (see Figure 12).
Imagine being offered to buy a business. This business is breakeven in a down year, makes an operating profit of a few hundred million dollars in a normal year, and in an exceptional period in 2021 made around US$1.5 billion profit. The person offers to sell you the business for nothing. This is the current investment opportunity for Louisiana Pacific. In addition to owning Smartside, it also owns the second largest oriented strand board business in North America and a successful woods product business in South America. The price of OSB is exceptionally volatile, but has recently delivered super-normal profits to Louisiana Pacific, enabling management to buy back 45% of shares on issue while maintaining net cash. At Louisiana Pacific’s current share price, we are paying the bottom end of fair value for Smartside and getting the OSB business practically for nothing.”
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Louisiana-Pacific Corporation (NYSE:LPX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held Louisiana-Pacific Corporation (NYSE:LPX) at the end of the second quarter which was 34 in the previous quarter.
We discussed Louisiana-Pacific Corporation (NYSE:LPX) in another article and shared the stock picks of Travis Cocke’s Voss Capital. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.
Disclosure: None. This article is originally published at Insider Monkey.
When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.
Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.
At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.
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Put another way, that’s roughly equal to:
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107 Amazons
140 Metas
84 Googles
65 Microsofts
And 55 Nvidias
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Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.
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Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.
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