7 Best Small-Cap Value Stocks to Buy According to Hedge Funds

2. Permian Resources Corporation (NYSE:PR)  

Market Cap: $9.55 billion 

Forward P/E: 8.92

EPS Growth This Year: 13.70%

Number of Hedge Fund Holders: 51

Permian Resources (NYSE:PR)  is an independent natural gas and oil company specializing in acquiring, optimizing, and developing oil and natural gas properties. Its assets and operations are concentrated in the Delaware Basin’s core and consist of more than 479,500 net leasehold acres and around 94,900 net royalty acres across the Permian Basin. A significant majority of the company’s assets are concentrated within the Delaware Basin in Eddy and Lea Counties, New Mexico, and Reeves and Ward Counties, Texas.

Permian Resources (NYSE:PR)  delivered strong Q2 2024 results. Its revenue increased 100% year-over-year to $1.25 billion. Net income skyrocketed 220% to $235.1 million, while earnings per share (EPS) came in at $0.38, beating analyst estimates of $0.36 per share. These results were driven by improvements in operational efficiencies, which enabled the company to raise its full-year production guidance for the second consecutive quarter while maintaining other guidance ranges. The company also announced the acquisition of Barilla Draw from OXY, which adds significant high-return inventory in the core of Texas Delaware.

The company’s oil production also exceeded expectations, reaching 153,000 barrels of oil per day and total production of 339,000 barrels of oil equivalent per day. This strong performance was boosted by several factors, such as D&C efficiencies accelerating cycle times, consistent healthy performance, and strong run times in the field.

For instance, it averaged 1,500 drilled feet per day and more than 21 pumping hours per day in Q2. Both of these are company records for a quarter. The company is now raising its full-year oil guidance for the second consecutive quarter, amounting to 4,500 barrels of oil per day increase in total compared to its initial guidance in February. The increase in guidance is a direct result of the outperformance of the company’s base business. It is also increasing its 2024 TIL guidance by around 15 wells. This is driven by its strong D&C efficiencies, which drive a 13% cost improvement in second quarter as compared to 2023.

Permian Resources (NYSE:PR) also saw strong gas and NGL performance in Q2, driven primarily by an increase in gas processors, switching to ethane recovery because of the current Permian gas market. The company’s workover costs reduced significantly due to a reduction in cost per failure and low failure rates on downhole lift equipment, making Q2 one of its strongest quarters to date. It is continuing to optimize its recently acquired wells, quickly improving equipment and implementing its best practices to drive efficiencies.