Laughing Water Capital, an investment management company, released its second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, Class A interests in Laughing Water Capital returned about 2.5% bringing year-to-date returns to 11.1%. The SP500TR and R2000 returned 4.3% and -3.3% in the second quarter and 15.3% and 1.7% year-to-date, respectively. The strength of the market is now concentrated in a small number of mega-cap stocks. The SP500’s “artificial intelligence”-related equities increased 14.7% during the second quarter, while the overall SP500 fell 1.2%. The firm does not own any of these stocks and focuses on the hidden corners of the market. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Laughing Water Capital highlighted stocks like APi Group Corporation (NYSE:APG), in the second quarter 2024 investor letter. APi Group Corporation (NYSE:APG) is a safety, specialty, and industrial services provider. The one-month return of APi Group Corporation (NYSE:APG) was -3.03%, and its shares gained 28.99% of their value over the last 52 weeks. On July 25, 2024, APi Group Corporation (NYSE:APG) stock closed at $36.49 per share with a market capitalization of $10.009 billion.
Laughing Water Capital stated the following regarding APi Group Corporation (NYSE:APG) in its Q2 2024 investor letter:
“APi Group Corporation (NYSE:APG) – I have historically referred to APi Group as our fire safety business, as the majority of the Company’s revenue and earnings are generated by their Safety Services segment, which is increasingly a recurring services business providing non-discretionary, statutorily mandated work on fire prevention systems within buildings. The Company continues to execute on their plan to widen margins while having 60% of revenue coming from recurring inspection and service work. Part of widening margins has been addition by subtraction, whereby the Company has been walking away from some less attractive business opportunities. This has led to some noise in the revenue line, which should now mostly be behind us. The Company has a long path to deploying capital in bolt on M&A, and recently widened this path by making a more sizeable acquisition in the Elevator Services arena. Similar to fire safety, elevator inspection and service work is non-discretionary and mandated by law. There should be an opportunity to cross-sell fire safety and elevator work, and both businesses can support additional growth through acquisition, which will allow APG to compound value for years.”
A team of engineers surveying a construction site in preparation for a new underground infrastructure.
APi Group Corporation (NYSE:APG) is not on our list of 31 Most Popular Stocks Among Hedge Funds. APi Group Corporation (NYSE:APG) was held by 39 hedge fund portfolios at the end of the first quarter, compared to 30 in the previous quarter, according to our database. In Q1 2024, APi Group Corporation (NYSE:APG) reported revenues of $1.6 billion, compared to $1.61 billion in Q1 2023. While we acknowledge the potential of APi Group Corporation (NYSE:APG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed APi Group Corporation (NYSE:APG) and shared Maran Capital Management’s views on the company in the previous quarter. Laughing Water Capital introduced APi Group Corporation (NYSE:APG) in the Q2 2020 letter. It became the largest holding after the firm added shares at a nearly 50% price decline earlier in 2022. In addition, please check out our hedge fund investor letters Q2 2024 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.