Laughing Water Capital, an investment management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter of 2025, Laughing Water Capital declined approximately -1% net of all expenses, bringing year-to-date returns to approximately -2.7%. The SP500TR and R2000 returned 12.4% and 8.1% respectively, in the quarter, and 14.8% and 10.4%, respectively, for YTD. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its third-quarter 2025 investor letter, Laughing Water Capital highlighted stocks such as Lifecore Biomedical, Inc. (NASDAQ:LFCR). Lifecore Biomedical, Inc. (NASDAQ:LFCR) is an integrated contract development and manufacturing organization. The one-month return of Lifecore Biomedical, Inc. (NASDAQ:LFCR) was -1.53%, and its shares gained 19.16% of their value over the last 52 weeks. On October 29, 2025, Lifecore Biomedical, Inc. (NASDAQ:LFCR) stock closed at $7.06 per share, with a market capitalization of $264.512 million.
Laughing Water Capital stated the following regarding Lifecore Biomedical, Inc. (NASDAQ:LFCR) in its third quarter 2025 investor letter:
“Lifecore Biomedical, Inc. (NASDAQ:LFCR) – Lifecore is our fill-finish CDMO. Essentially they put liquid medicines into vials or syringes. The thesis is that Lifecore has excess capacity to sell in an industry where demand far outstrips supply, and it takes years for new supply to come online. High fixed costs and low variable costs means that additional revenue will come with tremendous operating leverage. In the quarter the company announced multiple new customer wins including a GLP-1 and a large international pharmaceutical company, and there were several signs that winning additional business should be getting easier. Notably, the Food and Drug Administration (FDA) announced that drugs that are manufactured domestically will receive priority review. Further, while the news here is fast-changing, Trump indicated that companies that manufacture their drugs abroad will face 100% tariffs unless they are in process of developing domestic capacity. Lastly, an industry rag published a piece noting that recently there has been a problem with CDMOs leading biotechs on and then backing out of any potential deal. The implications of this are not crystal clear, but I believe CDMOs have been bailing on biotechs (smaller customers) so that they can focus on the bigger and better opportunities that are surfacing due to regulatory pressures on international pharmaceutical companies to move production to the U.S. All of these developments seem to be very good for the thesis.
On the flip side, the company filed an S-3 that included a shelf that could be used to raise equity capital, and the market seems to have interpreted this to mean that dilution would be forthcoming. However, the company has made clear that this is just good corporate housekeeping, and they have no intention to raise capital. Rather, as they only became current on their filings a year ago, this was the first time they were S-3 eligible, and a survey of other companies of similar size reveals that having a shelf in place is standard practice.
The net of these clear long-term positives and meaningless short-term negatives is that the stock declined 22% from intra-quarter high to quarter end.”
Lifecore Biomedical, Inc. (NASDAQ:LFCR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 15 hedge fund portfolios held Lifecore Biomedical, Inc. (NASDAQ:LFCR) at the end of the second quarter, up from 12 in the previous quarter. While we acknowledge the risk and potential of Lifecore Biomedical, Inc. (NASDAQ:LFCR) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Lifecore Biomedical, Inc. (NASDAQ:LFCR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Lifecore Biomedical, Inc. (NASDAQ:LFCR) and shared Greenhaven Road Capital’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2025 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.
