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.”
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.
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Video: Top 5 Stocks Among Hedge Funds
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