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Laughing Water Capital, an investment management company, released its first-quarter 2026 investor letter. A copy of the letter can be downloaded here. The Class A investment in Laughing Water Capital returned approximately -4.5% net of all fees and expenses in the first quarter of 2026. The SP500TR and R2000 returned -4.3% and 0.9% respectively, during the same period. Over the first ten years, since its inception, Laughing Water Capital returned approximately 410%, or 17.7% per year. Recent developments, such as AI breakthroughs and U.S. operations in Iran and Venezuela, demonstrate the enduring nature of global uncertainty. The firm believes volatility has generated possibilities that lead to portfolio modifications with recent additions reflecting shorter investment timelines, strong balance sheets, and near-term cash flows, with limited event path risk. In addition, please check the portfolio’s top five holdings to know its best picks in 2026.

In its first-quarter 2026 investor letter, Laughing Water Capital highlighted Lifecore Biomedical, Inc. (NASDAQ:LFCR). Lifecore Biomedical, Inc. (NASDAQ:LFCR) is an integrated contract development and manufacturing organization engages in the aseptic fill, and finish of formulations and highly viscous sterile injectable pharmaceutical drug or medical device products. On April 24, 2026, Lifecore Biomedical, Inc. (NASDAQ:LFCR) closed at $5.02 per share. One-month return of Lifecore Biomedical, Inc. (NASDAQ:LFCR) was 32.45%, and its shares lost 22.23% over the past 52 weeks. Lifecore Biomedical, Inc. (NASDAQ:LFCR) has a market capitalization of $188.14 million.

Laughing Water Capital stated the following regarding Lifecore Biomedical, Inc. (NASDAQ:LFCR) in its Q1 2026 investor letter:

"Lifecore Biomedical, Inc. (NASDAQ:LFCR) - Lifecore, our fill finish CDMO that puts drugs into syringes and vials, continues to win new business at an impressive rate. However, the time from winning new business to generating meaningful cash flows from that business is measured in years in the CDMO world. Additionally, Lifecore recently announced that much of their pipeline is moving to the right as customer timing has shifted. As a result, the stock has been severely punished.

The shifting timeline is of course frustrating, but I think the market is over-reacting to fears of a potential capital raise as the company’s series A convertible preferred shares mature this summer. However, these shares are designed to PIK at maturity if the company is unable to redeem them, so no immediate liquidity needs are on the horizon. As the business the company has already won comes in the door, the company will be well positioned to deal with this and other capital structure needs…” (Click here to read the full text)

Lifecore Biomedical, Inc. (NASDAQ:LFCR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 19 hedge fund portfolios held Lifecore Biomedical, Inc. (NASDAQ:LFCR) at the end of the fourth quarter, up from 17 in the previous quarter. While we acknowledge the potential of Lifecore Biomedical, Inc. (NASDAQ:LFCR) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Lifecore Biomedical, Inc. (NASDAQ:LFCR) and shared Laughing Water Capital stands on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q1 2026 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.