Home Hedge Funds Here’s Why Laughing Water Capital Sold Enzo Biochem Inc (ENZ)

Here’s Why Laughing Water Capital Sold Enzo Biochem Inc (ENZ)

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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 Enzo Biochem, Inc. (NYSE:ENZ) in the fourth quarter 2023 investor letter. Headquartered in Farmingdale, New York, Enzo Biochem, Inc. (NYSE:ENZ) is a diagnostics, clinical lab, and life sciences company. On January 29, 2024, Enzo Biochem, Inc. (NYSE:ENZ) stock closed at $1.27 per share. One-month return of Enzo Biochem, Inc. (NYSE:ENZ) was -15.33%, and its shares lost 5.22% of their value over the last 52 weeks. Enzo Biochem, Inc. (NYSE:ENZ) has a market capitalization of $64.122 million.

Laughing Water Capital stated the following regarding Enzo Biochem, Inc. (NYSE:ENZ) in its fourth quarter 2023 investor letter:

Enzo Biochem, Inc. (NYSE:ENZ) – As detailed in our 1H’23 letter, my investment in Enzo earlier this year led to a permanent loss of capital. In brief, after a multi-year activist battle, Enzo agreed to sell their clinical labs business to Labcorp (LH) for a price that was more then the current market cap of the Company. Enzo would continue to own another, subscale business that could prove to be quite valuable, and in fact, a recently hired CEO had grown a similar business by 5x previously. I purchased shares before the deal closed under the reasoning that it is no secret that the entire clinical labs industry is being consolidated by Labcorp and Quest Diagnostics (DGX), meaning that these two companies are in frequent competition on deals. I reasoned that Labcorp would not walk away from the deal, because if they did, in every future potential deal Quest would remind the seller that Labcorp cannot be trusted. Shortly after my purchase Enzo was hit by a cyber attack with unknown costs, and Labcorp did in fact substantially reduce their purchase price. I exited the position shortly thereafter.”

An overhead shot of a medical laboratory with a technician in a face mask working on a diagnostic blood test.

Enzo Biochem, Inc. (NYSE:ENZ) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 5 hedge fund portfolios held Enzo Biochem, Inc. (NYSE:ENZ) at the end of third quarter which was 8 in the previous quarter.

We discussed Enzo Biochem, Inc. (NYSE:ENZ) 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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