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Laughing Water Capital, an investment management company, has released its Q4 2023 Investor Letter. You can download a copy of the same here. In the fourth quarter, the return on investments in the Fund was 3.2%, and the annualized return before fees and expenses was 11.8%. SP500TR and R2000 returned 11.7% and 14.0%, respectively, for the quarter, and year-to-date returns of 26.3% and 17.0%. Additionally, you can check out the fund’s top five holdings to learn about the best stocks for 2023.
Laughing Water Capital featured stocks such as Hilton Grand Vacations (NYSE:HGV) in its Q4 2023 Investor Letter. Headquartered in Orlando, Florida, Hilton Grand Vacations Inc. (NYSE:HGV) is a timeshare company that manages vacation ownership resorts. On January 29, 2024, Hilton Grand Vacations Inc. (NYSE:HGV) stock closed at $43.34 per share. His 1-month return for Hilton Grand Vacations (NYSE:HGV) is his 4.51%, and the company’s stock has lost his 8.49% of its value over the past 52 weeks. Hilton Grand Vacations, Inc. (NYSE:HGV) has a market capitalization of $4.68 billion.
Laughing Water Capital said the following about Hilton Grand Vacations, Inc. (NYSE:HGV) in its Q4 2023 investor letter:
“Hilton Grand Vacations Co., Ltd.” (NYSE:HGV) – HGV, the Hilton-branded timeshare business, has had a year with undeniable improvements in normalized profitability and undeniable short-term issues. On the issue side, as mentioned above, the company was forced to reduce its guidance in the wake of the widely publicized wildfires in Hawaii. Additionally, part of HGV’s business involves financing purchases by new owners, a spread business in which the company borrows at his one rate and then lends at a higher rate. Rising interest rates put pressure on this spread.
Regarding an undeniable improvement in terms of normalized profitability, HGV announced the acquisition of Bluegreen Vacations (BVH), a non-branded player affiliated with Bass Pro Shops and NASCAR. I was initially hesitant about this acquisition as HGV is still consolidating for its acquisition of Diamond Resorts in 2021 and has only recently returned to its pre-COVID-19 pattern of aggressively repurchasing stock. I’ll admit I wasn’t thrilled. However, these are rare assets that need to be purchased when available and the price paid after the easily achieved synergies is very reasonable and HGV was not the highest bidder (BVH preferred to sell at a lower price to partner with HGV). These assets extend HGV’s customer acquisition funnel to the lower tiers of the Hilton Honors loyalty network. Importantly, there is a proven history in the timeshare industry of branded players being able to realize more revenue from unbranded assets. Finally, management indicated its intention to continue share buybacks…” (Click here to read the full story)
Aerial view of a luxury beachfront vacation resort owned by a timeshare company.
Hilton Grand Vacations (NYSE:HGV) isn’t on the list of 30 most popular stocks among hedge funds. Our database shows that 24 hedge fund portfolios owned Hilton Grand Vacations Inc. (NYSE:HGV) at the end of the third quarter, compared to 29 in the prior quarter.
We covered Hilton Grand Vacations, Inc. (NYSE:HGV) in a separate article and shared Ruffing Water Capital’s take on the company last quarter. Additionally, for investor letters from hedge funds and other leading investors, please visit our Hedge Fund Investor Letters Q4 2023 page.
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Disclosure: None. This article was originally published on Insider Monkey.
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