Laughing Water Capital, an investment management company, released its fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. In the fourth quarter, investment in the fund returned 3.2% bringing the yearly returns to 11.8%, net of all fees and expenses. The SP500TR and R2000 returned 11.7% and 14.0% during the quarter, respectively, bringing their year-to-date returns to 26.3% and 17.0%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

Laughing Water Capital featured stocks such as Hilton Grand Vacations Inc. (NYSE:HGV) in the fourth quarter 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. One-month return of Hilton Grand Vacations Inc. (NYSE:HGV) was 4.51%, and its shares lost 8.49% of their value over the last 52 weeks. Hilton Grand Vacations Inc. (NYSE:HGV) has a market capitalization of $4.68 billion.

Laughing Water Capital stated the following regarding Hilton Grand Vacations Inc. (NYSE:HGV) in its fourth quarter 2023 investor letter:

“Hilton Grand Vacations Inc. (NYSE:HGV) – HGV, the Hilton branded time share business, had a year that came with undeniable improvements to normalized earnings power, and undeniable short-term problems. On the problem side, as mentioned previously the Company was forced to cut guidance following the well-publicized wild fires in Hawaii. Additionally, part of HGV’s business is tied to financing purchases by new owners, and this is a spread business where the Company borrows at one rate, and then lends at a higher rate. Rising interest rates put pressure on this spread.

On the undeniable improvements to normalized earnings power side, HGV announced they would be acquiring Bluegreen Vacations (BVH), an un-branded player that has partnerships with Bass Pro Shops and NASCAR. I admit I was initially not thrilled with this acquisition as HGV is still integrating the 2021 acquisition of Diamond Resorts, and has only recently returned to their pre-Covid pattern of aggressively repurchasing shares. However, these are scarce assets that must be bought when they are available, the price paid after easily achievable synergies is very reasonable, HGV was NOT the high bidder (BVH preferred to sell at a lower price in order to partner with HGV), and these assets open up HGV’s customer acquisition funnel to the lower end of the Hilton Honors loyalty network. Importantly, there is a demonstrated history of branded players being able to realize more revenue out of unbranded assets in the time share industry. Lastly, management has indicated they would continue to repurchase shares…” (Click here to read the full text)

Aerial view of luxury beachfront vacation resorts that are owned by timeshare company.

Hilton Grand Vacations Inc. (NYSE:HGV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Hilton Grand Vacations Inc. (NYSE:HGV) at the end of third quarter which was 29 in the previous quarter.

We discussed Hilton Grand Vacations Inc. (NYSE:HGV) in another article and shared Laughing Water Capital’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q4 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.



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