Here’s Why Greenhaven Road Capital Invested in Lifecore Biomedical (LFCR)
Greenhaven Road Capital, an investment management company, released its first quarter 2023 investor letter. A copy of the same can be downloaded here. The fund returned 17% in the first quarter. Even though fears of runaway inflation waned in the quarter, investors’ concerns relating to the macroeconomic factors weren’t fully eliminated. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Greenhaven Road Capital highlighted stocks like Lifecore Biomedical, Inc. (NASDAQ:LFCR) in the first quarter 2023 investor letter. Headquartered in Santa Maria, California, Lifecore Biomedical, Inc. (NASDAQ:LFCR) is an integrated contract development and manufacturing organization. On May 19, 2023, Lifecore Biomedical, Inc. (NASDAQ:LFCR) stock closed at $5.64 per share. One-month return of Lifecore Biomedical, Inc. (NASDAQ:LFCR) was 29.36%, and its shares lost 40.32% of their value over the last 52 weeks. Lifecore Biomedical, Inc. (NASDAQ:LFCR) has a market capitalization of $171 million.
Greenhaven Road Capital made the following comment about Lifecore Biomedical, Inc. (NASDAQ:LFCR) in its Q1 2023 investor letter:
“Lifecore Biomedical, Inc. (NASDAQ:LFCR) – Lifecore was previously called Landec and had two businesses. The first business was what I would affectionately call a crappy avocado business with volatile earnings due to both variations in crop size and pricing. After several fits and starts, they have finally divested it. The other business is a contract development and manufacturing organization (CDMO) which manufactures drugs for pharmaceutical companies. This is a specialized activity and since certain classes of drugs need to go through a reapproval process if the manufacturer is changed, it makes an excellent business with real switching costs and barriers to entry.
Lifecore is the manufacturer of 29 different FDA-approved products, which provides diversification but also leads to lumpy results as margins vary by product and utilization varies from quarter to quarter. In March, the company announced that it would miss earnings and, as a result, put it in violation of its debt covenants. The market reacted violently, sending the shares down a whopping 67%. Around the same time, Lifecore also announced the largest customer win in its history, a prepayment of $10M by the new customer, and the initiation of a strategic review process to sell the company. There is an activist investor who owns 9.9% of the company. Now, the sale of the company is really just a sale of the high quality CDMO business…” (Click here to read the full text)
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Lifecore Biomedical, Inc. (NASDAQ:LFCR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. s per our database, 15 hedge fund portfolios held Lifecore Biomedical, Inc. (NASDAQ:LFCR) at the end of the fourth quarter which was 13 in the previous quarter.
We discussed Lifecore Biomedical, Inc. (NASDAQ:LFCR) in another article and shared Cove Street Capital's views on the company. In addition, please check out our hedge fund investor letters Q1 2023 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.
