Legacy Ridge Capital Management, LLC recently published its “Legacy Ridge Capital Partners Equity Fund I” second quarter 2024 investor letter. A copy of the same can be downloaded here. The fund returned 25.6% gross, and 19.7% net of accrued performance fees through June. The performance has remained decent both in absolute and relative terms, despite being only 70% invested in 9 cyclical companies and not hedging positions, while animal spirits are once again inflamed across markets. For more information on the fund’s best picks in 2024, please check its top five holdings.
Legacy Ridge Capital Management highlighted stocks like EQT Corporation (NYSE:EQT), in the second quarter 2024 investor letter. EQT Corporation (NYSE:EQT) is a natural gas production company. The one-month return of EQT Corporation (NYSE:EQT) was -7.03%, and its shares lost 18.68% of their value over the last 52 weeks. On July 25, 2024, EQT Corporation (NYSE:EQT) stock closed at $34.38 per share with a market capitalization of $20.423 billion.
Legacy Ridge Capital Management stated the following regarding EQT Corporation (NYSE:EQT) in its Q2 2024 investor letter:
“In addition to Vistra’s performance compelling us to reorder the top of the portfolio, two other positions had news warranting brief updates: Summit Midstream Partners (SMLP) continues restructuring the business and balance sheet, and Equitrans Midstream (ETRN) is getting acquired by EQT Corporation (NYSE:EQT).
Lastly, we wrote about Equitrans Midstream (ETRN) in the 2023 mid-year letter, primarily discussing that company’s long and expensive journey completing the Mountain Valley Pipeline and the short-term opportunity we took advantage of. After all the hand wringing and stress with respect to that one project the whole business will end up right where it started, as part of EQT Corp. (EQT). In March, EQT announced they are acquiring each ETRN share for .3504 EQT shares. The transaction should close within the next several weeks.
EQT is the top natural gas producer in the United States with a dominant position in the Appalachian Basin and will become one of the lowest cost gas producers in the US, if not the lowest, after consummating this merger. Our fund is going to exchange the ETRN shares and become EQT owners. The investment checks important boxes for us: 1) a disciplined management team focused on tangible value creation; 2) an ability to generate significant FCF that gets returned to shareholders; 3) exposure to a commodity with strong secular demand trends, which gives us a call-option on higher prices. At only 5% of our assets it will start as a small position for us, but with natural gas prices volatile and back in the low-$2’s we should have ample opportunity to exploit the volatility over time and hopefully make it bigger.”
A storage facility for natural gas, showing the vast reserves of this abundant energy source.
EQT Corporation (NYSE:EQT) is not on our list of 31 Most Popular Stocks Among Hedge Funds. EQT Corporation (NYSE:EQT) was held by 41 hedge fund portfolios at the end of the first quarter, compared to 40 in the previous quarter, according to our database. EQT Corporation (NYSE:EQT) has completed the acquisition of Equitrans Midstream, which has transformed EQT into America’s only large-scale, vertically integrated natural gas business. While we acknowledge the potential of EQT Corporation (NYSE:EQT) 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 EQT Corporation (NYSE:EQT) and shared the list of stocks that will skyrocket. In addition, please check out our hedge fund investor letters Q2 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.