Diamond Hill Capital, an investment management company, released its “Mid Cap Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In Q2, markets saw a modest increase, providing favorable results in most regions and nations. In the quarter the strategy lagged the Russell Midcap Index. The relative weakness was mostly concentrated in the industrial holdings, which underperformed their index counterparts. Another area of relative weakness came from holdings in utilities and consumer discretionary. On the other hand, holdings in health care and materials were comparatively strong. The strategy returned -4.39% (gross) and -4.56% (net) in the quarter vs -3.35% for the index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.
Diamond Hill Mid Cap Strategy highlighted stocks like Civitas Resources, Inc. (NYSE:CIVI) in the second quarter 2024 investor letter. Civitas Resources, Inc. (NYSE:CIVI) is an oil and natural gas exploration and production company. The one-month return of Civitas Resources, Inc. (NYSE:CIVI) was -9.68%, and its shares lost 22.45% of their value over the last 52 weeks. On August 26, 2024, Civitas Resources, Inc. (NYSE:CIVI) stock closed at $62.31 per share with a market capitalization of $6.128 billion.
Diamond Hill Mid Cap Strategy stated the following regarding Civitas Resources, Inc. (NYSE:CIVI) in its Q2 2024 investor letter:
“Despite rising valuations, we continue finding attractively valued, quality companies the market is overlooking amid its increasingly narrow focus on the mega-cap technology stocks dominating the major indices. In Q2, we introduced new positions in Sysco Corporation, Civitas Resources, Inc. (NYSE:CIVI), Labcorp Holdings and VeriSign.
Civitas Resources is an oil and natural gas explorer and producer focused primarily on the DJ Basin. It has recently made several acquisitions in the Permian Basin as it attempts to expand and diversify its holdings beyond the DJ Basin — a decision that we appreciate. It has low-cost drilling inventory, and we believe the management team responsibly runs the company. We added it to the portfolio in Q2, as we think its assets and cash-generation potential remain undervalued by the market.”
A close up of a tanker truck transporting crude oil, natural gas liquids, and natural gas.
Civitas Resources, Inc. (NYSE:CIVI) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held Civitas Resources, Inc. (NYSE:CIVI) at the end of the second quarter which was 37 in the previous quarter. While we acknowledge the potential of Civitas Resources, Inc. (NYSE:CIVI) 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.
In another article, we discussed Civitas Resources, Inc. (NYSE:CIVI) and shared the list of top oil producing companies in the US. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.