Laughing Water Capital, an investment management company, released its fourth-quarter 2025 investor letter. In the quarter, Laughing Water Capital returned ~6.8%, bringing the full-year returns to ~3.9% net of fees and expenses. In comparison, the SP500TR and R2000 returned approximately 2.7% and 2.2%, respectively, in the quarter, and finished the year up by 17.9% and 12.8%, respectively. A copy of the letter can be downloaded here. The Fund outperformed the indexes last year, but it has lagged behind them in the current year. However, what really matters is the cumulative returns over the long run, as volatility tends to smooth out over time. The Portfolio is well-positioned in this regard, delivering strong results on a cumulative basis since inception and returned about 400%, vs ~332% for the SP500TR and ~175% for our most relevant benchmark, the R2000. In addition, you can check the Strategy’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Laughing Water Capital highlighted stocks such as Thryv Holdings, Inc. (NASDAQ:THRY). In the quarter, the firm exited its long-term holding Thryv Holdings, Inc. (NASDAQ:THRY). Thryv Holdings, Inc. (NASDAQ:THRY) is a digital marketing solutions and cloud-based tools provider to small-to-medium-sized businesses. On January 15, 2026, Thryv Holdings, Inc. (NASDAQ:THRY) stock closed at $5.36 per share. One-month return of Thryv Holdings, Inc. (NASDAQ:THRY) was -12.27%, and its shares lost 66.05% of their value over the last 52 weeks. With around 69.96 million shares outstanding, Thryv Holdings, Inc. (NASDAQ:THRY) has a market capitalization of $235.499 million.
Laughing Water Capital stated the following regarding Thryv Holdings, Inc. (NASDAQ:THRY) in its fourth quarter 2025 investor letter:
“Thryv Holdings, Inc. (NASDAQ:THRY) – I have exited our position in long-time holding THRY. While we made some money along the way with some well-timed sales at significantly higher prices than where I sold our last shares, Thryv was a significant detractor for 2025, and likely belongs in the mistake pile. The original thesis was that Thryv’s declining but cash gushing Yellow Pages business obfuscated a fast-growing small business software business. This software was not necessarily dominant versus competitors, but I believed Thryv had a competitive advantage in terms of distribution. This was because Thryv had a captive audience in the form of its Yellow Pages customers, while competitors were dependent on cold-calls and Google key words. Combined with tailwinds from aging baby boomers who are retiring and leaving their businesses in the hands of the next generation that is more apt to upgrade their software stack, i believed Thryv was well positioned for success.
However, there was a clear timing element: the distribution advantage is finite. My fear at this point is that a combination of a broad decline in software multiples, a poorly executed acquisition, and poor management communication have led to a complete evaporation of the market’s faith in management and the business, and the stock is now significantly lower than it was five years ago when the business came public. We are business owners first, but there are times when the realities of the stock market – and the implied opportunity costs – should not be ignored. As I see it, the timeline for Thryv to lever their distribution advantage into scale and product advantages is shrinking, it is very difficult to win back the market’s trust when management credibility is impaired, sustained negative stock performance weighs on employee morale, and the technical setup of every shareholder over a 5 year period being underwater likely will require a multi-year digestion period so I have moved on.”
Thryv Holdings, Inc. (NASDAQ:THRY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 29 hedge fund portfolios held Thryv Holdings, Inc. (NASDAQ:THRY) at the end of the third quarter, up from 17 in the previous quarter. While we acknowledge the risk and potential of Thryv Holdings, Inc. (NASDAQ:THRY) 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 Thryv Holdings, Inc. (NASDAQ:THRY) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Thryv Holdings, Inc. (NASDAQ:THRY) and shared Laughing Water Capital’s views on the company. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
Disclosure: None. This article is originally published at Insider Monkey.
