Laughing Water Capital, an investment management company, released its first-quarter 2026 investor letter. A copy of the letter can be downloaded here. The Class A investment in Laughing Water Capital returned approximately -4.5% net of all fees and expenses in the first quarter of 2026. The SP500TR and R2000 returned -4.3% and 0.9% respectively, during the same period. Over the first ten years, since its inception, Laughing Water Capital returned approximately 410%, or 17.7% per year. Recent developments, such as AI breakthroughs and U.S. operations in Iran and Venezuela, demonstrate the enduring nature of global uncertainty. The firm believes volatility has generated possibilities that lead to portfolio modifications with recent additions reflecting shorter investment timelines, strong balance sheets, and near-term cash flows, with limited event path risk. In addition, please check the portfolio’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Laughing Water Capital highlighted stocks like PAR Technology Corporation (NYSE:PAR). PAR Technology Corporation (NYSE:PAR) is a leading technology company that offers cloud-based hardware and software solutions to the restaurant and retail industries. On April 24, 2026, PAR Technology Corporation (NYSE:PAR) closed at $13.71 per share. One-month return of PAR Technology Corporation (NYSE:PAR) was 6.86%, and its shares lost 76.95% over the past 52 weeks. PAR Technology Corporation (NYSE:PAR) has a market capitalization of $565.49 million.
Laughing Water Capital stated the following regarding PAR Technology Corporation (NYSE:PAR) in its Q1 2026 investor letter:
“PAR Technology Corporation (NYSE:PAR) – PAR was our restaurant software business. I continue to believe that PAR will win their category, but I was never completely comfortable with valuation, which for PAR and other software companies has been measured as a multiple of annual recurring revenue, or “ARR” over the last several years. This concept has gone out of favor due to the rise of AI, and it is not clear to me when it will come back in favor. Consider that during the last major software disruption in the early 2000s companies like Microsoft traded at 12x earnings. As I said, I believe that PAR will win their category, but it will be some time before customer wins translate into real earnings, and with ARR out of favor the downside protection to me in this investment was not clear. Further, there has always been an element of reflexivity tied to PAR’s capital structure due to convertible debt. A high stock price allows you to refinance converts with minimal pain, while a low share price brings significant dilution. I exited our position prior to PAR raising a new convert at significantly lower conversion prices than the previous instrument.”
PAR Technology Corporation (NYSE:PAR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 27 hedge fund portfolios held PAR Technology Corporation (NYSE:PAR) at the end of the fourth quarter, up from 24 in the previous quarter. PAR Technology Corporation’s (NYSE:PAR) fourth quarter revenue increased nearly 14% year-over-year to $120.1 million. While we acknowledge the risk and potential of PAR Technology Corporation (NYSE:PAR) 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 PAR Technology Corporation (NYSE:PAR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered PAR Technology Corporation (NYSE:PAR) and shared the list of oversold tech stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q1 2026 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.
