Laughing Water Capital, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. For the fourth quarter of 2021, an investment in Class A shares of Laughing Water Capital (“LWC”) returned less than 1% vs 11.0% and 2.1% for the SP500TR and R2000 respectively. For the full year, LWC returned approximately 39%, vs. 28.7% and 14.8% for the SP500TR and R2000 respectively. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Laughing Water Capital, in its Q4 2021 investor letter, mentioned Whole Earth Brands, Inc. (NASDAQ: FREE) and discussed its stance on the firm. Whole Earth Brands, Inc. is a Chicago, Illinois-based global food company with a $354.7 million market capitalization. FREE delivered a -14.15% return since the beginning of the year, while its 12-month returns are down by -33.14%. The stock closed at $9.22 per share on February 19, 2022.
Here is what Laughing Water Capital has to say about Whole Earth Brands, Inc. in its Q4 2021 investor letter:
“Whole Earth Brands (FREE) equity trades at less than 8x my estimate of normalized FCF, while peers trade at more than 20x, suggesting that it is a value stock. Whole Earth Brands also almost doubled their revenue over the last year or two, and intends to continue to grow through acquisition, suggesting it is a growth stock.
There is not much to report with Whole Earth Brands, our “free from” sweeteners business. Management is hard at work digesting recent acquisitions and steering cash flow toward paying down debt. The company remains materially undervalued vs. traditional packaged foods peers, and I have encouraged the company to revamp their marketing efforts toward more ESG focused messaging in an attempt to capture some of the zeitgeist (and resultant huge multiples) attached to other food companies that are seen as re-defining their category. While our partnership is specifically designed to ignore short term price moves, in this case, a re-rating higher in the near to intermediate term will likely have a multiplicative effect on value creation as in my view at present the company’s undervalued stock is not attractive as acquisition currency.”
Photo by Andra Ion on Unsplash
Our calculations show that Whole Earth Brands, Inc. (NASDAQ: FREE) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. FREE was in 15 hedge fund portfolios at the end of the third quarter of 2021, compared to 16 funds in the previous quarter. Whole Earth Brands, Inc. (NASDAQ: FREE) delivered a -24.86% return in the past 3 months.
In October 2021, we also shared another hedge fund’s views on FREE in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
