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Laughing Water Capital is Betting on Avid Bioservices (CDMO) Stock

Laughing Water Capital recently released its Q2 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 29.5% for the quarter (net of fees), outperforming their benchmark, the S&P 500 Index which returned 20.5% in the same quarter. You should check out Laughing Water 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, Laughing Water Capital highlighted a few stocks and Avid Bioservices Inc. (NASDAQ:CDMO) is one of them. Avid Bioservices Inc. (NASDAQ:CDMO) is a biotechnology company. Year-to-date, Avid Bioservices Inc. (NASDAQ:CDMO) stock gained 10.7% and on August 18th it had a closing price of $8.36. Laughing Water Capital cared to mention Avid Bioservices Inc. (NASDAQ:CDMO) in its investor letter, though they didn’t say why they really like the stock. All they said is this:

“Avid Bioservices (CDMO) – Avid, our large molecule contract drug manufacturer, is back on track after a temporary problem with an equipment malfunction which was reported last quarter. This is a recession proof business that recently announced a new CEO, an expanded salesforce, and a record backlog. Perhaps more interesting, the company announced they are in the early stages of expanding their manufacturing footprint to meet increasing demand. This is especially notable as they are presently under-utilizing their existing footprint. Disclosure around Avid’s clients is mostly confidential, but with a little sleuthing, one can determine that their clients have big plans, and Avid should be a natural beneficiary in the years to come. Importantly, this is not a business where supply from new competition can quickly come online, because a long-term regulatory track record cannot be built overnight.”

Countries With Highest Medical Research Spending

Nestor Rizhniak/Shutterstock.com

In Q1 2020, the number of bullish hedge fund positions on Avid Bioservices Inc. (NASDAQ:CDMO) stock decreased by about 35% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Avid Bioservices’ growth potential. Our calculations showed that Avid Bioservices Inc. (NASDAQ:CDMO) 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. Cannabis stocks are roaring back in 2020, so we are checking out this under-the-radar stock. We go through lists like the 10 most profitable companies in America 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.