“Thryv Holdings (THRY) is the “Growthiest” of Our Investments”: Laughing Water Capital

Laughing Water Capital, an investment management company, released its fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, investment in Class A shares of the fund returned 4.0%, net of all fees and expenses, compared to 7.6% and 6.2% returns for the SP500TR and R2000, respectively. For 2022 the fund returned 31.7% compared to -18.1% and -20.4% returns for the SP500TR and R2000 respectively. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Laughing Water Capital highlighted stocks like Thryv Holdings, Inc. (NASDAQ:THRY) in the Q4 2022 investor letter. Headquartered in DFW Airport, Texas, Thryv Holdings, Inc. (NASDAQ:THRY) is a digital marketing solutions and cloud-based tools provider. On February 15, 2023, Thryv Holdings, Inc. (NASDAQ:THRY) stock closed at $24.24 per share. One-month return of Thryv Holdings, Inc. (NASDAQ:THRY) was 19.59%, and its shares lost 19.23% of their value over the last 52 weeks. Thryv Holdings, Inc. (NASDAQ:THRY) has a market capitalization of 835.679 million.

Laughing Water Capital made the following comment about Thryv Holdings, Inc. (NASDAQ:THRY)  in its Q4 2022 investor letter:

Thryv Holdings, Inc. (NASDAQ:THRY) – Thryv is the “growthiest” of our investments. The Company is using its legacy Yellow Pages business as the base from which to launch a SAAS product that greatly improves operations for small and medium businesses. While this SAAS business could currently be profitable, a highly incentivized and experienced management team is instead steering cash flow back into growth. SMBs are way behind the curve when it comes to moving their operations to the cloud, and as this inevitable change takes place, Thryv will realize considerable growth and operating leverage, which will drive earnings power.

Perception will change as cash flow from the declining Yellow Pages business improves the Company’s balance sheet, and as the software business reaches scale and begins to gush cash. Additionally, THRY is still mostly unknown on Wall Street as it came public through a direct listing and screens as a marketing company, not a software company.

Management has laid out a plan to reach $200M in EBITDA from their SAAS business in 5 years. If they are successful, assuming that the Yellow Pages business is run off suggests that THRY currently trades ~4.5x EBITDA looking out ~5 years. Slower growing SMB software providers trade north of 20x, suggesting that THRY could be up more than 400%. Additional upside is possible as in five years the Company will still only be scratching the surface of a massive secular trend.”

Thryv Holdings, Inc. (NASDAQ:THRY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Thryv Holdings, Inc. (NASDAQ:THRY)  at the end of the third quarter which was 17 in the previous quarter.

We discussed Thryv Holdings, Inc. (NASDAQ:THRY) in another article and shared Bonhoeffer Capital Management’s views on the company. In addition, please check out our hedge fund investor letters Q4 2022 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.