Laughing Water Capital, an investment management company, released its first-quarter 2023 investor letter. A copy of the same can be downloaded here. In the first quarter, investment in the fund returned 7.5%, net of all fees and expenses, compared to 7.5% and 2.7% returns for the SP500TR and R2000, respectively. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Laughing Water Capital highlighted stocks like Lifecore Biomedical, Inc. (NASDAQ:LFCR) in the first quarter 2023 investor letter. Headquartered in Santa Maria, California, Lifecore Biomedical, Inc. (NASDAQ:LFCR) is an integrated contract development and manufacturing organization. On June 7, 2023, Lifecore Biomedical, Inc. (NASDAQ:LFCR) stock closed at $8.34 per share. One-month return of Lifecore Biomedical, Inc. (NASDAQ:LFCR) was 90.85%, and its shares lost 15.76% of their value over the last 52 weeks. Lifecore Biomedical, Inc. (NASDAQ:LFCR) has a market capitalization of $252.887 million.
Laughing Water Capital made the following comment about Lifecore Biomedical, Inc. (NASDAQ:LFCR) in its Q1 2023 investor letter:
“Lifecore Biomedical, Inc. (NASDAQ:LFCR) – Lifecore, until recently known as Landec Inc., was formerly a non-sensical combination of a pre-made salad business, a processed avocado business, other food related assets, and a high quality CDMO that specializes in fill-finish work for highly viscous liquids (think of a liquid so dense that if you slapped a bucket of this liquid, there would not be a splash). This business combination never made sense, and over the last ~2 years the food related assets have been divested, leaving the CDMO as a pureplay. This is inline with my original thesis. However, my original thesis also imagined that the proceeds from the sale of the food assets would go a long way toward repairing an over-leveraged balance sheet. Unfortunately, due to a combination of unforeseen circumstances, the asset sales fell short of my assumed proceeds, leaving the company as a pure play CDMO with a balance sheet problem.
We have been involved in the biologic CDMO space for more than 5 years through our ownership of Avid Bioservices (CDMO). That investment has been a homerun for us as strong secular tailwinds, high normalized margins, low normalized capex, high switching costs, and a business that is fairly predictable over longer periods of time have fueled our gains. However, it has been a wild ride, with many bumps in the road as despite being fairy predictable over longer periods of time, quarter to quarter CDMO businesses can be very lumpy as customers adjust their orders based on their own inventory levels…” (Click here to read the full text)
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Lifecore Biomedical, Inc. (NASDAQ:LFCR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 13 hedge fund portfolios held Lifecore Biomedical, Inc. (NASDAQ:LFCR) at the end of first quarter 2023 which was 15 in the previous quarter.
We discussed Lifecore Biomedical, Inc. (NASDAQ:LFCR) in another article and shared Greenhaven Road Capital’s views on the company. In addition, please check out our hedge fund investor letters Q1 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.
