Greenhaven Road Capital recently released its Q2 2020 Investor Letter, a copy of which you can download here. Greenhaven’s estimated returns for the second quarter exceeded +50%, more than markets have returned over many five-year periods. Both funds are up single digits for the year, comparing favorably to the Russell 2000, which ended June down -13% year to date. You should check out Greenhaven Road Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.
In the said letter, Greenhaven Road Capital highlighted a few stocks and PAR Technology Corp (NYSE:PAR) is one of them. PAR Technology Corp (NYSE:PAR) is a provider of systems and service solutions for the hospitality industry. Year-to-date, PAR Technology Corp (NYSE:PAR) stock gained 1.1% and on July 27th it had a closing price of $31.08. Here is what Greenhaven Road Capital said:
“PAR Technology (PAR) – We have owned PAR for well over a year and I have written about it extensively. Their “jewel” business is the restaurant Point of Sale (POS) software for QSR (quick service restaurants). As the pandemic unfolded and shutdowns spread, PAR’s share price was decimated, falling as low as $9.62 in March after starting the year around $31. One might assume that with a 70% decline in share price, PAR’s restaurant software and customers were on their way to extinction. However, QSRs that primarily do drive-thru and take-out business have held up quite well. In fact, PAR’s churn (customers who cancelled the software) went DOWN year over year. The pandemic has highlighted the value of a modern POS system that integrates with delivery systems like Uber Eats and enables mobile app ordering. Restaurants with a modern POS actually have a revenue advantage. PAR’s pipeline has a shadow backlog of restaurants to sell into/install that is almost as big as their current installed base. In addition, because the POS is the spine of the restaurant operations, they have the opportunity to integrate with other functionality such as inventory management and scheduling. PAR should continue to grow locations and revenue per location as they add additional functionality. It is a matter of time before PAR sells off its ancillary government business and gets further scale and becomes a cleaner SAAS story, likely concurrent with another software acquisition, and likely multiple expansion (higher share price).
I believe that PAR will exit this traumatic period as a net beneficiary. CEO Savneet Singh struck a bullish tone in his annual shareholder letter where he wrote, “So much of success is driven by being in the right market at the right time, we believe we’ve focused PAR into the right market. Said differently, our focus towards restaurant software at PAR is choosing to fish in a very shallow pond with a very large net. While we believe Brink POS is a special product, there is an industry tidal wave of fish flowing right into our little pond.” I believe that he is correct.”
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This isn’t the first time Greenhaven Road Capital talked about PAR Technology Corp (NYSE:PAR) favorably either. The investment firm has been a long time PAR Technology Corp (NYSE:PAR) bull. A year ago we shared Greenhaven Road Capital’s bullish PAR Technology Corp (NYSE:PAR) thesis in this article.
In Q1 2020, the number of bullish hedge fund positions on PAR Technology Corp (NYSE:PAR) stock decreased by about 33% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with PAR’s growth potential. Our calculations showed that PAR Technology Corp (NYSE:PAR) isn’t ranked among the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
Video: Top 5 Stocks Among Hedge Funds
At Insider Monkey we scour multiple sources to uncover the next great investment idea. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so we are checking out this under-the-radar lithium stock. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. You can subscribe to our free enewsletter below to receive our stories in your inbox:
Disclosure: None. This article is originally published at Insider Monkey.
