Cove Street Capital Sold its Holding in Lifecore Biomedical (LFCR)

Investment management company Cove Street Capital recently released its “Small Cap Value Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund returned -10.77% (net of fees) compared to -3.28% for the Russell 2000 Index and -3.64% for the Russell 2000 Value Index. For the first half of 2024, the S&P 500 is up 15%. Its biggest component, Nvidia, has increased by 150% over that time. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.

Cove Street Capital Small Cap Value Fund highlighted stocks like Lifecore Biomedical, Inc. (NASDAQ:LFCR) in the second quarter 2024 investor letter. Lifecore Biomedical, Inc. (NASDAQ:LFCR) is an integrated contract development and manufacturing organization. The one-month return of Lifecore Biomedical, Inc. (NASDAQ:LFCR) was -9.93%, and its shares lost 50.51% of their value over the last 52 weeks. On July 10, 2024, Lifecore Biomedical, Inc. (NASDAQ:LFCR) stock closed at $4.90 per share with a market capitalization of $162.743 million.

Cove Street Capital Small Cap Value Fund stated the following regarding Lifecore Biomedical, Inc. (NASDAQ:LFCR) in its Q2 2024 investor letter:

"In notable changes in the portfolio, we have exited all common shares of Lifecore Biomedical, Inc. (NASDAQ:LFCR) which has been a mixed bag (at best) for the past several years. We entered at different vantage points and sold stock at different vantage points as the company has struggled with management not equipped for the job, a Board that moved too slowly to address said issue, and a balance sheet that has acted as a speedbump in taking advantage of growth opportunities. An investment banking process ended in a draw, with the Board opting to hire a new CEO – whom we like after a first glance and chat – and they are pursuing a “go it alone” path (although, I would argue that this company remains unlikely to remain independent over more than the shorter run). We continue to like the industry and their position in it, but there is simply a lot of wood to chop here for the next few years."

A village pharmacist fulfilling a patient's medication prescription in a rural area.

Lifecore Biomedical, Inc. (NASDAQ:LFCR) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 14 hedge fund portfolios held Lifecore Biomedical, Inc. (NASDAQ:LFCR) at the end of the first quarter which was 19 in the previous quarter. While we acknowledge the potential of Lifecore Biomedical, Inc. (NASDAQ:LFCR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We discussed Lifecore Biomedical, Inc. (NASDAQ:LFCR) in another article and shared the list of stocks that are on hedge funds’ radar. Cove Street Capital shared its views on Lifecore Biomedical, Inc. (NASDAQ:LFCR) in its Q1 2024 investor letter. In addition, please check out our hedge fund investor letters Q2 2024 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.