Laughing Water Capital, an investment management company, released its fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. In the fourth quarter, investment in the fund returned 3.2% bringing the yearly returns to 11.8%, net of all fees and expenses. The SP500TR and R2000 returned 11.7% and 14.0% during the quarter, respectively, bringing their year-to-date returns to 26.3% and 17.0%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Laughing Water Capital featured stocks such as Lifecore Biomedical, Inc. (NASDAQ:LFCR) in the fourth quarter 2023 investor letter. Lifecore Biomedical, Inc. (NASDAQ:LFCR) is an integrated contract development and manufacturing organization headquartered in Chaska, Minnesota. On January 29, 2024, Lifecore Biomedical, Inc. (NASDAQ:LFCR) stock closed at $7.02 per share. One-month return of Lifecore Biomedical, Inc. (NASDAQ:LFCR) was 10.03%, and its shares gained 13.04% of their value over the last 52 weeks. Lifecore Biomedical, Inc. (NASDAQ:LFCR) has a market capitalization of $207.181 million.
Laughing Water Capital stated the following regarding Lifecore Biomedical, Inc. (NASDAQ:LFCR) in its fourth quarter 2023 investor letter:
“Lifecore Biomedical, Inc. (NASDAQ:LFCR) – I have written extensively in the past on LFCR, our fill-finish contract drug manufacturing organization, so I suspect it is familiar to you. In brief, after a battle with activist investors and a flirtation with bankruptcy, the Company is presently in the midst of a strategic review that I believe will eventually lead to a sale of the business at a significant premium. However, those hopes are on hold as earlier this year the Company failed to file their financial statements in a timely manner. Importantly, all indications are that the delay is due to historical issues that are non-core to Lifecore’s go-forward business. This is incredibly frustrating as Lifecore has been a big bet for us, and I cannot think of a way to predict that financial statements that had been previously blessed by an auditor with access to material non public information would later be flagged for review.
However, the Company has provided several updates that suggest that the value of the core business continues to go up as they deal with these legacy issues. This view is confirmed by commentary from other industry participants which suggests that demand for Lifecore’s assets remains very high. The lack of financial statements – and in particular an updated balance sheet – is uncomfortable, but we can take comfort from a recent filing that reading between the lines suggests the balance sheet is fine, and importantly included information on increased business with Lifecore’s largest customer, Alcon (ALC).I continue to believe that the most likely outcome of the Company’s strategic review will be a sale of the business. From current prices, all that is necessary for ~100% upside is for a buyer to put a middling multiple on the Company’s initial 2023 guidance, giving no credit for announced new business wins, and substantial capacity additions. I would expect shares to re-rate higher in the near term when current financial statements are filed. All that being said, it seems unlikely that my original upside cases will be hit, as anything that could go wrong has gone wrong, and industry multiples have broadly contracted over the last year. In any case, until such time as the Company becomes current on their financial statements, we are in a holding pattern.”
A biopharmaceutical facility with technicians working on a manufacturing line of treatments and preventions.
Lifecore Biomedical, Inc. (NASDAQ:LFCR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 12 hedge fund portfolios held Lifecore Biomedical, Inc. (NASDAQ:LFCR) at the end of third quarter which was 15 in the previous quarter.
We discussed Lifecore Biomedical, Inc. (NASDAQ:LFCR) in another article and shared Cove Street Capital’s views on the company. In addition, please check out our hedge fund investor letters Q4 2023 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.
