Choice Equities Capital Management, a hedge fund manager, released its first-quarter 2024 investor letter recently. A copy of the same can be downloaded here. In the first quarter, the fund generated gains of +14.2% on a net basis in comparison to the Russell 2000’s quarterly gain of +5.2%. The S&P 500 generated a gain of +10.6% during the same period. Since its inception in 2017, the fund has generated annualized gains of +15.0% versus +7.8% and +14.5% returns for the indexes, respectively. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Choice Equities Capital Management featured stocks like PAR Technology Corporation (NYSE:PAR) in the first quarter 2024 investor letter. Headquartered in New Hartford, New York, PAR Technology Corporation (NYSE:PAR) offers omnichannel cloud-based hardware and software solutions to the restaurant and retail industries. On May 1, 2024, PAR Technology Corporation (NYSE:PAR) stock closed at $42.20 per share. One-month return of PAR Technology Corporation (NYSE:PAR) was -1.91%, and its shares gained 50.32% of their value over the last 52 weeks. PAR Technology Corporation (NYSE:PAR) has a market capitalization of $1.448 billion.
Choice Equities Capital Management stated the following regarding PAR Technology Corporation (NYSE:PAR) in its first quarter 2024 investor letter:
“PAR Technology Corporation (NYSE:PAR) – Par Technology’s Brink segment is getting bigger. When discussed in our last quarterly letter, the segment looked poised to grow to over $150M later this year in annual recurring revenue (ARR), from $20M four years ago, with announced deals in the pipeline further putting the segment on a path towards a $200M run rate next year. But now, after announcing acquisitions of Stuzo and TASK simultaneously in March, the company looks to be on a path for run-rate ARRs to approach $300M later this year, with substantial continued growth beyond as the company begins to penetrate new accounts and new geographies with an expanded menu of additive service offerings.
Together, the two deals look like a masterstroke of capital allocation for CEO Savneet Singh, as both have strong strategic merit and impressive financial implications for the company’s fundamentals. The Stuzo deal, which brings Par a loyalty platform software provider focused on C-stores and fuel retailers, will contribute nearly ~$50M in ARR by yearend at 40%+ EBITDA margins, and will also eliminate a competitor as the company was previously targeting this market with their Punnch offering. The TASK deal is equally exciting from a strategic perspective. As an Australia-based global foodservice transaction platform tailored for major global brands, it will also contribute ~$50M in ARR from its end-to-end transaction management platform with customers like Starbucks and McDonalds. This broadened reach opens a path to international geographies where Par had a limited ability to serve previously. The two deals plus other big recent customer wins like Wendy’s and Burger King more than double the size of the ARR revenue base from a year ago and meaningfully improve the company’s profitability profile. The deals were in part financed by a PIPE offering and came with just 20% shareholder dilution, partly aided by the expected sale of the company’s Government business which looks increasingly likely.
Contemplating further profitable expansion from here is no great stretch either, as the company now has relationships with multiple owners of multiple restaurant brands, who have shown a preference to use the same vendors where they can. Now, the company is truly positioned as a one stop shop of software unified commerce offerings, with far broader addressable markets to grow into internationally, within the convenience store space and with other adjacent product rollouts in payments, back office, loyalty, online ordering and drive-through that all connect to a restaurant’s point-of-sale (POS) operating software. Today Par looks increasingly well-positioned to emerge as the winner-take-most with its mission-critical POS based software offering in the restaurant enterprise software space. Equally noteworthy, today the company also trades at a little more than half the multiple of ARR as most of its peers.”
A distribution centre operations manager overseeing the delivery of point-of-sale (POS) management solutions.
PAR Technology Corporation (NYSE:PAR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held PAR Technology Corporation (NYSE:PAR) at the end of fourth quarter which was 17 in the previous quarter.
We previously discussed PAR Technology Corporation (NYSE:PAR) in another article, where we shared Greenhaven Road Capital’s views on the company. In addition, please check out our hedge fund investor letters Q1 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.
