Laughing Water Capital, an investment management company, released its second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, Class A interests in Laughing Water Capital returned about 2.5% bringing year-to-date returns to 11.1%. The SP500TR and R2000 returned 4.3% and -3.3% in the second quarter and 15.3% and 1.7% year-to-date, respectively. The strength of the market is now concentrated in a small number of mega-cap stocks. The SP500’s “artificial intelligence”-related equities increased 14.7% during the second quarter, while the overall SP500 fell 1.2%. The firm does not own any of these stocks and focuses on the hidden corners of the market. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Laughing Water Capital highlighted stocks like Hilton Grand Vacations Inc. (NYSE:HGV), in the second quarter 2024 investor letter. Hilton Grand Vacations Inc. (NYSE:HGV) is a timeshare company that manages vacation ownership resorts. The one-month return of Hilton Grand Vacations Inc. (NYSE:HGV) was 3.51%, and its shares lost 8.84% of their value over the last 52 weeks. On July 25, 2024, Hilton Grand Vacations Inc. (NYSE:HGV) stock closed at $41.85 per share with a market capitalization of $4.34 billion.
Laughing Water Capital stated the following regarding Hilton Grand Vacations Inc. (NYSE:HGV) in its Q2 2024 investor letter:
“Hilton Grand Vacations Inc. (NYSE:HGV) – I estimate that HGV, our time share business, is trading at a ~25% free cash flow yield and buying back ~10% of its market cap annually. This is a formula that will eventually work very well, unless people decide to stop going on vacation.”
Aerial view of luxury beachfront vacation resorts that are owned by timeshare company.
Hilton Grand Vacations Inc. (NYSE:HGV) is not on our list of 31 Most Popular Stocks Among Hedge Funds. Hilton Grand Vacations Inc. (NYSE:HGV) was held by 25 hedge fund portfolios at the end of the first quarter, compared to 28 in the previous quarter, according to our database. The first quarter total revenue of Hilton Grand Vacations Inc. (NYSE:HGV), excluding cost reimbursements, was $1.03 billion. The adjusted EBITDA was $270 million, with margins of 26%. While we acknowledge the potential of Hilton Grand Vacations Inc. (NYSE:HGV) 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 Hilton Grand Vacations Inc. (NYSE:HGV) and shared Laughing Water Capital’s views on the company. In addition, please check out our hedge fund investor letters Q2 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.
