L1 Capital, an investment management company, released its “L1 Long Short Fund” third quarter 2022 investor letter. – a copy of which can be downloaded here. A quarterly portfolio net return of -5.9% was recorded by the fund for the third quarter of 2022, underperforming the S&P ASX200 Index which had a 0.4% gain for the same period. Try to spare some time to check the fund’s top 5 holdings for you to have an idea about their best stock picks this 2022.
In its Q3 2022 investor letter, L1 Capital Long Short Fund mentioned Cenovus Energy Inc. (NYSE:CVE) and explained its insights for the company. Founded in 2009, Cenovus Energy Inc. (NYSE:CVE) is a Calgary, Canada-based integrated oil and natural gas company with a $37.6 billion market capitalization. Cenovus Energy Inc. (NYSE:CVE) delivered a 58.88% return since the beginning of the year, while its 12-month returns are up by 64.23%. The stock closed at $19.51 per share on October 25, 2022.
Here is what L1 Capital Long Short Fund has to say about Cenovus Energy Inc. (NYSE:CVE) in its Q3 2022 investor letter:
“Cenovus Energy (Long -13%) shares declined over the quarter due to an ~18% decline in oil prices on increasing fears of a U.S recession and a slowdown in global growth. Given the long-life nature of its oil sand assets and its low cost of production, we estimate Cenovus is free cash flow break-even at an oil price of ~US$40/bbl. Despite the recent fall, oil prices remain more than double this break-even point, implying considerable free cash flow generation potential for the company at current levels, with Cenovus currently trading on a consensus FY22 free cash flow yield of around 20%. There are also additional value realisation catalysts with the company continuing to progress the de-gearing of its balance sheet via organic cash generation and asset sales.”
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Our calculations show that Cenovus Energy Inc. (NYSE:CVE) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Cenovus Energy Inc. (NYSE:CVE) was in 42 hedge fund portfolios at the end of the second quarter of 2022, compared to 44 funds in the previous quarter. Cenovus Energy Inc. (NYSE:CVE) delivered a 11.42% return in the past 3 months.
In September 2022, we also shared another hedge fund’s views on Cenovus Energy Inc. (NYSE:CVE) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q3 page.
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Disclosure: None. This article is originally published at Insider Monkey.