Greenhaven Road Capital, an investment management company, released its third-quarter 2024 investor letter. A copy of the letter can be downloaded here. The Fund returned approximately +15% in the third quarter, bringing year-to-date returns to approximately +12% net. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Greenhaven Road Capital highlighted stocks like Sable Offshore Corp. (NYSE:SOC) in the third quarter 2024 investor letter. Sable Offshore Corp. (NYSE:SOC) is an oil and gas exploration and development company. The one-month return of Sable Offshore Corp. (NYSE:SOC) was 11.12%, and its shares gained 114.60% of their value over the last 52 weeks. On November 14, 2024, Sable Offshore Corp. (NYSE:SOC) stock closed at $22.49 per share with a market capitalization of $2.196 billion.
Greenhaven Road Capital stated the following regarding Sable Offshore Corp. (NYSE:SOC) in its Q3 2024 investor letter:
“Sable Offshore Corp. (NYSE:SOC): There are certain attributes of a business that I find attractive. Among the very top are recurring revenue, operating leverage, high insider ownership, and a high free cash flow yield. If we are lucky, we typically get three out of the four attributes, but rarely all four.
In the decade-plus existence of Greenhaven Road, we have made exactly zero investments in oil and gas companies, in part because I struggle with having a strong view on the underlying commodity. There is an argument that oil is a finite resource and a critical input for transportation, and thus there are industrial economies supporting a higher-for-longer price. We always seem to be one geopolitical event away from a spike in oil prices. However, there is also an argument that technologies such as fracking have unleashed a wave of supply that will overwhelm the demand that is already declining due to electric cars and improved technologies, a result that does not support the sustained higher prices for oil thesis.
I see merits in both arguments and, therefore, don’t have a strong view on the price of oil. That said, I do have a loosely held belief that consumption will increase as incomes rise for billions of people across the developing world. I have a vivid memory of traveling in India and seeing a family of five riding a moped. I regularly saw three or even four people on a single vehicle, but this was a record. Many of those families would likely have preferred to be in a car, on two mopeds, or, even better, in two cars. Every combination implies greater oil consumption in the medium term as incomes rise…” (Click here to read the full text)
A drilling rig pumping oil and gas from a well in Latin America.
Sable Offshore Corp. (NYSE:SOC) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 11 hedge fund portfolios held Sable Offshore Corp. (NYSE:SOC) at the end of the second quarter which was 16 in the previous quarter. While we acknowledge the potential of Sable Offshore Corp. (NYSE:SOC) 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 Sable Offshore Corp. (NYSE:SOC) and shared the list of best performing energy stocks in 2024. 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.
