L1 Capital, an investment management firm, released its “L1 Long Short Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. Over the quarter, global markets moved higher, due to lower inflation data which continued to trend downward as central banks increased interest rate reductions. The portfolio returned 2.4% for the quarter compared to a 7.8% return for the S&P/ASX 200 AI. Over the past five years, the portfolio return was 18.4% p.a compared to 8.4% p.a. for the index. In addition, you can check the fund’s top 5 holdings to know its best picks in 2024.
L1 Long Short Fund highlighted stocks like Cenovus Energy Inc. (NYSE:CVE) in the third quarter 2024 investor letter. Headquartered in Calgary, Canada, Cenovus Energy Inc. (NYSE:CVE) is an energy company that develops, produces, refines, transports, and markets crude oil, natural gas, and refined petroleum products. The one-month return of Cenovus Energy Inc. (NYSE:CVE) was -6.64%, and its shares lost 12.12% of their value over the last 52 weeks. On November 12, 2024, Cenovus Energy Inc. (NYSE:CVE) stock closed at $15.74 per share with a market capitalization of $28.797 billion.
L1 Long Short Fund stated the following regarding Cenovus Energy Inc. (NYSE:CVE) in its Q3 2024 investor letter:
“Cenovus Energy Inc. (NYSE:CVE) (Long -15%) and MEG Energy (Long -13%) shares fell as the WTI oil price decreased 17% to ~US$69/bbl on the back of increased concerns around a potential increase in OPEC supply along with slower global economic growth. Despite OPEC delaying a previously planned increase in oil output, the oil price continued to weaken due to the weaker demand outlook. During the quarter, we attended the Peters & Co oil and gas conference in Toronto, meeting one on one with management from Cenovus and MEG Energy, along with the entire peer group. We continue to favour Cenovus and MEG in the sector due to their strong cash flow generation, the long -life nature of their oil sands assets, low cost of production and strong balance sheet s. Both Cenovus and MEG have now transitioned to returning 100% of free cash flow back to shareholders, having reached their respective net debt targets. As a result, we see both names offering sector leading shareholder returns, combined with some modest, accretive output growth.”
A fleet of oil tankers at sea, representing the global reach of a crude oil supplier.
Cenovus Energy Inc. (NYSE:CVE) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held Cenovus Energy Inc. (NYSE:CVE) at the end of the second quarter which was 44 in the previous quarter. While we acknowledge the potential of Cenovus Energy Inc. (NYSE:CVE) 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 Cenovus Energy Inc. (NYSE:CVE) and shared the list of most profitable value stocks to invest in. Cenovus Energy Inc. (NYSE:CVE) contributed to L1 Long Short Fund’s performance in Q1 2024, as its shares performed strongly due to increase in WTI oil price. In addition, please check out our hedge fund investor letters Q3 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.