Laughing Water Capital, an investment management company, released its second-quarter 2026 investor letter. A copy of the letter can be downloaded here. The second quarter was exceptionally good for the portfolio, with Class A investment in Laughing Water Capital returning approximately 39.8% net of all fees and expenses, bringing the YTD return to approximately 33.6% net. The SP500TR and R2000 returned approximately 15.0% and 21.5%, respectively, in the second quarter. The impressive performance was driven by three of the top five positions being acquired, with its largest position nearly doubling during the quarter. The letter emphasizes that patience can often lead to profits in an inefficient market characterized by fluctuations, suggesting that investing in undervalued stocks can yield good long-term returns. In addition, please check the portfolio’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Laughing Water Capital highlighted AnaptysBio, Inc. (NASDAQ:ANAB) as a newly added position. AnaptysBio, Inc. (NASDAQ:ANAB) is a clinical-stage biotechnology company focusing on immunology therapeutics for autoimmune and inflammatory diseases. On July 13, 2026, AnaptysBio, Inc. (NASDAQ:ANAB) closed at $69.81 per share, reflecting a market capitalization of $2.07 billion. AnaptysBio, Inc. (NASDAQ:ANAB) posted a one-month return of 21.18%, while its shares gained 293.28% over the past 52 weeks.
Laughing Water Capital stated the following regarding AnaptysBio, Inc. (NASDAQ:ANAB) in its Q2 2026 investor update:
“AnaptysBio, Inc. (NASDAQ:ANAB) – AnaptysBio is a special situation that I expect will resolve itself very quickly. In brief, following the recently completed taxable spinoff of their developmental drug assets, Anaptys is now an asset light royalty company primarily collecting tolls on the sales of Jemperli, a fast-growing cancer drug that is being commercialized in partnership with GSK. If this were where the story ended, I believe we would have purchased our shares at a reasonable discount to the present value of the future royalty payments.
However, AnaptysBio has the potential for lotto ticket upside in the near-immediate future as they have accused GSK of violating the terms of their commercial agreement, and a trial has been set for July 14-17. My read of the situation suggests that GSK is in a very weak position with a lot to lose because if AnaptysBio is successful at trial, they could recover the entirety of Jemperli. In this low probability scenario, ANAB shares could be worth nearly $300, vs our average purchase price of below $60. A much higher probability scenario is that GSK chooses to settle before trial, or perhaps even buy Anaptysbio outright. I expect that these scenarios could result in 50-80+% upside for our investment…” (Click here to read the full text)
AnaptysBio, Inc. (NASDAQ:ANAB) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 33 hedge fund portfolios held AnaptysBio, Inc. (NASDAQ:ANAB) at the end of the first quarter, up from 29 in the previous quarter. While we acknowledge the risk and potential of AnaptysBio, Inc. (NASDAQ:ANAB) 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 AnaptysBio, Inc. (NASDAQ:ANAB) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered AnaptysBio, Inc. (NASDAQ:ANAB) and shared the list of best performing healthcare stocks so far in 2026. In addition, please check out our hedge fund investor letters Q2 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.
