Laughing Water Capital, an investment management company, released its second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, Class A interests in Laughing Water Capital returned about 2.5% bringing year-to-date returns to 11.1%. The SP500TR and R2000 returned 4.3% and -3.3% in the second quarter and 15.3% and 1.7% year-to-date, respectively. The strength of the market is now concentrated in a small number of mega-cap stocks. The SP500’s “artificial intelligence”-related equities increased 14.7% during the second quarter, while the overall SP500 fell 1.2%. The firm does not own any of these stocks and focuses on the hidden corners of the market. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Laughing Water Capital highlighted stocks like Lifecore Biomedical, Inc. (NASDAQ:LFCR) in the second quarter 2024 investor letter. Lifecore Biomedical, Inc. (NASDAQ:LFCR) is an integrated contract development and manufacturing organization. The one-month return of Lifecore Biomedical, Inc. (NASDAQ:LFCR) was 18.32%, and its shares lost 42.44% of their value over the last 52 weeks. On July 25, 2024, Lifecore Biomedical, Inc. (NASDAQ:LFCR) stock closed at $6.07 per share with a market capitalization of $201.602 million.
Laughing Water Capital stated the following regarding Lifecore Biomedical, Inc. (NASDAQ:LFCR) in its Q2 2024 investor letter:
“Lifecore Biomedical, Inc. (NASDAQ:LFCR) – Lifecore, our CDMO that focuses on filling vials and syringes with injectable drugs, was also discussed in our Q1 letter. The stock continues to wallow after the Company announced a strategic review did not end in a sale earlier this year. This disappointing outcome has led those investors who were only focused on a sale to exit the stock. Additionally, LFCR remains delinquent in the filing of its 10Qs, although I suspect that will be remedied in the coming weeks.
From my perspective, the industry backdrop remains extremely positive as LFCR has brought new capacity online at a time when the industry is starved due to the unanticipated explosion in demand for GLP-1 weight loss drugs. Additionally, the proposed Biosecure Act should lead to re-shoring of pharmaceuticals, which should also benefit LFCR. Lastly, a new CEO, Paul Josephs, took the helm at LFCR in May, and the board is in the process of being refreshed. I came away from my initial conversation with Josephs impressed, and am looking forward to an investor update sometime in the fall where I believe he will lay out his strategic vision for the business. The stock is deep in an information vacuum, and any commentary about the future of the business should go a long way toward re-rating shares, especially if this includes forward guidance, which I believe could approach $40M in EBITDA looking out a year. The balance sheet here is admittedly not as strong as I would like, and an indication that the business is generating free cash flow would be especially well received. Personally, I am open to strengthening the balance sheet through a rights offering, and think shares would rally if this were done.”
A village pharmacist fulfilling a patient’s medication prescription in a rural area.
Lifecore Biomedical, Inc. (NASDAQ:LFCR) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 14 hedge fund portfolios held Lifecore Biomedical, Inc. (NASDAQ:LFCR) at the end of the first quarter which was 19 in the previous quarter. While we acknowledge the potential of Lifecore Biomedical, Inc. (NASDAQ:LFCR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Lifecore Biomedical, Inc. (NASDAQ:LFCR) and shared Cove Street Capital Small Cap Value Fund’s views on the company. Laughing Water Capital explained its investment in Lifecore Biomedical, Inc. (NASDAQ:LFCR) in the first quarter 2024 investor letter. In addition, please check out our hedge fund investor letters Q2 2024 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.
