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Laughing Water Capital is Betting on Iteris (ITI) 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 Iteris Inc. (NASDAQ:ITI) is one of them. Iteris Inc. (NASDAQ:ITI) is a technology company. Year-to-date, Iteris Inc. (NASDAQ:ITI) stock gained 2.2% and on August 18th it had a closing price of $5.05. Laughing Water Capital cared to mention Iteris Inc. (NASDAQ:ITI) in its investor letter, though they didn’t say why they really like the stock. All they said is this:

“Iteris Inc. (ITI) – Iteris took the long, long, long overdue step of exiting their cash burning venture stage Agriculture business during the quarter. From here, the company should be a cash flow positive pure play intelligent traffic control business. Importantly, the company has indicated that its current operating structure can support $200M in revenue, meaning that the next ~100M should come with significant operating leverage. Management has indicated – and industry trends confirm – that they expect double digit organic growth going forward, and that the mix should be increasingly software centric. These factors suggest operating leverage at the segment level and at the corporate level, which should drive significant free cash flows. Further leverage is likely to present itself in the form of bolt on M&A. Importantly, with some gentle prodding, the company has begun to upgrade the quality of its board. Shareholders are becoming inpatient, and if management cannot produce the long promised operating leverage in the near future, as fiduciaries the board should feel obligated to maximize equity value by realizing the strategic value of the assets through a sale.”

Pixabay/Public Domain

This isn’t the first time Laughing Water Capital talked about Iteris Inc. (NASDAQ:ITI) favorably either. The investment firm has been a long time Iteris Inc. (NASDAQ:ITI) bull. In 2017, we shared Laughing Water Capital’s bullish Iteris Inc. (NASDAQ:ITI) thesis in this article.

Our calculations showed that Iteris Inc. (NASDAQ:ITI) 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.