Markets

Insider Trading

Hedge Funds

Retirement

Opinion

Legal Zoom’s (LZ) Debt-Free, Cash-Rich Balance Sheet Makes it a Long-Term Holding of Madison Small Cap Fund

Madison Investments, an investment advisor, released its “Madison Small Cap Fund” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund declined 1.06% outperforming a 3.28% decline for the Russell 2000 Index and a 4.27% decline for the Russell 2500 Index. In the second quarter, the small-cap market was weak. Strong stock selection drove the outperformance. In addition, you can check the fund’s top 5 holdings to know its best picks in 2024.

Madison Small Cap Fund highlighted stocks like LegalZoom.com, Inc. (NASDAQ:LZ) in its Q2 2024 investor letter. LegalZoom.com, Inc. (NASDAQ:LZ) is an online platform that supports the legal, compliance, and business management needs of small businesses, and consumers. The one-month return of LegalZoom.com, Inc. (NASDAQ:LZ) was -21.80%, and its shares lost 53.91% of their value over the last 52 weeks. On July 19, 2024, LegalZoom.com, Inc. (NASDAQ:LZ) stock closed at $6.42 per share with a market capitalization of $1.208 billion.

Madison Small Cap Fund stated the following regarding LegalZoom.com, Inc. (NASDAQ:LZ) in its Q2 2024 investor letter:

“Our worst performing sectors for the quarter were Industrials and Materials, both very cyclically sensitive areas. During the second quarter, several bellwether industrial companies reported disappointing results driven by macroeconomic weakness. The Industrial sector has seen some of the strongest fundamentals since the COVID lows as distributors built buffer inventory stock during the days of tight supply chains and strong stimulus demand. And so we were not surprised to see a natural slowdown after several years of growth. However, we are uncertain regarding the magnitude and duration and are watching fundamentals closely. Our worst performing stocks here were LegalZoom.com, Inc. (NASDAQ:LZ), Summit Materials, and WillScot Mobile Mini.

Legal Zoom (LZ) delivered a challenging first quarter result. During the earnings conference call, management openly discussed losing market share in the all-important first quarter, which has historically been the seasonally strongest quarter for new business formations – the locomotive of LZ’s business. This is troubling for several reasons. Our thesis has been that LZ solutions offer automation for new business formation with arguably the easiest, most comprehensive, and cost-effective solution, competitively speaking. New business formations historically have grown at a 5% compound annual growth rate (CAGR) and growth above that must come from market share gains. So, losing market share is quite possibly a thesis breaker, which is why we have not opportunistically added to this investment. So, why are we holding on? Legal Zoom has a debt free, cash rich balance sheet. Following the poor results and stock sell off, the board announced a material expansion of their stock buyback program, a signal, we believe, in their confidence regarding the long-term opportunity for the company. Furthermore, there were several company specific reasons why the company viewed the share losses as temporary. Most importantly, a deliberate pullback in marketing spending as they reorganized and streamlined their salesforce. Although this investment is on a short leash, if the company can display share stability in the next few quarters, we would consider adding to our position. Legal Zoom is quite profitable, with solid operating margins and, we believe, a very attractively valued stock.”

16 Best Franchises to Open With $10K in 2023

LegalZoom.com, Inc. (NASDAQ:LZ) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held LegalZoom.com, Inc. (NASDAQ:LZ) at the end of the first quarter which was 26 in the previous quarter. The first quarter revenue of LegalZoom.com, Inc. (NASDAQ:LZ) was $174 million, up 5% year over year (see the details here). While we acknowledge the potential of LegalZoom.com, Inc. (NASDAQ:LZ) 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 LegalZoom.com, Inc. (NASDAQ:LZ) and shared the list of biggest gig economy companies in the world. Madison Small Cap Fund added LegalZoom.com, Inc. (NASDAQ:LZ) to its portfolio in the fourth quarter of 2023. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

The whispers are turning into roars.

Artificial intelligence isn’t science fiction anymore.

It’s the revolution reshaping every industry on the planet.

From driverless cars to medical breakthroughs, AI is on the cusp of a global explosion, and savvy investors stand to reap the rewards.

Here’s why this is the prime moment to jump on the AI bandwagon:

Exponential Growth on the Horizon: Forget linear growth – AI is poised for a hockey stick trajectory.

Imagine every sector, from healthcare to finance, infused with superhuman intelligence.

We’re talking disease prediction, hyper-personalized marketing, and automated logistics that streamline everything.

This isn’t a maybe – it’s an inevitability.

Early investors will be the ones positioned to ride the wave of this technological tsunami.

Ground Floor Opportunity: Remember the early days of the internet?

Those who saw the potential of tech giants back then are sitting pretty today.

AI is at a similar inflection point.

We’re not talking about established players – we’re talking about nimble startups with groundbreaking ideas and the potential to become the next Google or Amazon.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

So, buckle up and get ready for the ride of your investment life!

Act Now and Unlock a Potential 10,000% Return: This AI Stock is a Diamond in the Rough (But Our Help is Key!)

The AI revolution is upon us, and savvy investors stand to make a fortune.

But with so many choices, how do you find the hidden gem – the company poised for explosive growth?

That’s where our expertise comes in.

We’ve got the answer, but there’s a twist…

Imagine an AI company so groundbreaking, so far ahead of the curve, that even if its stock price quadrupled today, it would still be considered ridiculously cheap.

That’s the potential you’re looking at. This isn’t just about a decent return – we’re talking about a 10,000% gain over the next decade!

Our research team has identified a hidden gem – an AI company with cutting-edge technology, massive potential, and a current stock price that screams opportunity.

This company boasts the most advanced technology in the AI sector, putting them leagues ahead of competitors.

It’s like having a race car on a go-kart track.

They have a strong possibility of cornering entire markets, becoming the undisputed leader in their field.

Here’s the catch (it’s a good one): To uncover this sleeping giant, you’ll need our exclusive intel.

We want to make sure none of our valued readers miss out on this groundbreaking opportunity!

That’s why we’re slashing the price of our Premium Readership Newsletter by a whopping 70%.

For a ridiculously low price of just $29, you can unlock a year’s worth of in-depth investment research and exclusive insights – that’s less than a single restaurant meal!

Here’s why this is a deal you can’t afford to pass up:

• Access to our Detailed Report on this Game-Changing AI Stock: Our in-depth report dives deep into our #1 AI stock’s groundbreaking technology and massive growth potential.

• 11 New Issues of Our Premium Readership Newsletter: You will also receive 11 new issues and at least one new stock pick per month from our monthly newsletter’s portfolio over the next 12 months. These stocks are handpicked by our research director, Dr. Inan Dogan.

• One free upcoming issue of our 70+ page Quarterly Newsletter: A value of $149

• Bonus Reports: Premium access to members-only fund manager video interviews

• Ad-Free Browsing: Enjoy a year of investment research free from distracting banner and pop-up ads, allowing you to focus on uncovering the next big opportunity.

• 30-Day Money-Back Guarantee:  If you’re not absolutely satisfied with our service, we’ll provide a full refund within 30 days, no questions asked.

 

Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.

Here’s what to do next:

1. Head over to our website and subscribe to our Premium Readership Newsletter for just $29.

2. Enjoy a year of ad-free browsing, exclusive access to our in-depth report on the revolutionary AI company, and the upcoming issues of our Premium Readership Newsletter over the next 12 months.

3. Sit back, relax, and know that you’re backed by our ironclad 30-day money-back guarantee.

Don’t miss out on this incredible opportunity! Subscribe now and take control of your AI investment future!


No worries about auto-renewals! Our 30-Day Money-Back Guarantee applies whether you’re joining us for the first time or renewing your subscription a year later!

A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…