Laughing Water Capital’s View on Lifecore Biomedical (LFCR)

Laughing Water Capital, an investment management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter of 2025, Class A interests in Laughing Water Capital returned approximately 13.1% net of all expenses. The SP500TR and R2000 returned 10.9% and 8.5%, respectively. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second quarter 2025 investor letter, Laughing Water Capital highlighted stocks such as Lifecore Biomedical, Inc. (NASDAQ:LFCR). Lifecore Biomedical, Inc. (NASDAQ:LFCR) is an integrated contract development and manufacturing organization. The one-month return of Lifecore Biomedical, Inc. (NASDAQ:LFCR) was -8.51%, and its shares gained 24.05% of their value over the last 52 weeks. On July 23, 2025, Lifecore Biomedical, Inc. (NASDAQ:LFCR) stock closed at $7.53 per share, with a market capitalization of $278.801 million.

Laughing Water Capital stated the following regarding Lifecore Biomedical, Inc. (NASDAQ:LFCR) in its second quarter 2025 investor letter:

“Lifecore Biomedical, Inc. (NASDAQ:LFCR) – Lifecore, our fill-finish CDMO, continues to work toward their dual goals of increasing capacity utilization and expanding margins. I continue to believe that achieving these goals is very much a “when” rather than an “if.” This belief was founded on global supply and demand dynamics, strengthened by the BIOSECURE Act, and reinforced by the National Security Commission delivering a report and action plan to Congress, which calls for the re-shoring of the biotech supply chain. To top it off, Trump has recently stated that pharmaceuticals manufactured abroad will be subject to 200% tariffs. Considering that building and certifying new fill-finish capacity can take 4 or 5 years, it seems that it would be much easier to partner with a company like Lifecore.

The sales cycle here is slow, but all indications are that the pipeline is active, and major international pharma and biotech companies have been conducting diligence on Lifecore’s facilities. Shares continue to trade well below where frequent industry M&A has taken place, and as the last public domestic CDMO of any size, I believe LFCR will eventually be acquired. ~6x revenue would be a reasonable multiple based on past transactions, suggesting a price of more than $13 per share today, and closer to $16 on 2026 numbers.”

In another article, we covered Lifecore Biomedical, Inc. (NASDAQ:LFCR) and shared Greenhaven Road Capital’s views on the company in the company. In addition, please check out our hedge fund investor letters Q2 2025 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.