Seven Corners Capital, an investment management company, released its Q3 2024 investor letter. A copy of the letter can be downloaded here. Seven Corners Capital’s composite portfolio finished Q3 2024 increasing around 14%, while the S&P 500 increased by approximately 21%. This represents a 7% underperformance in the first half of the year. Since 2020 (on a “Pandemic stacked basis”), the SCC Composite Portfolio has increased by ~127% compared to ~79% for the S&P 500, including all dividends received. This is an outperformance of 4,800 basis points compared to the index. In addition, you can check the fund’s top 5 holdings to know its best picks in 2024..
Seven Corners Capital highlighted stocks like SandRidge Energy, Inc. (NYSE:SD) in the third quarter 2024 investor letter. SandRidge Energy, Inc. (NYSE:SD) is an oil and gas exploration and production company. The one-month return of SandRidge Energy, Inc. (NYSE:SD) was -4.09%, and its shares lost 14.45% of their value over the last 52 weeks. On December 9, 2024, SandRidge Energy, Inc. (NYSE:SD) stock closed at $11.25 per share with a market capitalization of $418.655 million.
Seven Corners Capital stated the following regarding SandRidge Energy, Inc. (NYSE:SD) in its Q3 2024 investor letter:
“SandRidge Energy, Inc. (NYSE:SD), 8% position (Cost Basis: $5.53)
Sandridge is SCC’s largest energy holding and was down 9% during the first 3 quarters of 2024. The long thesis here remains that the secular decline in O&G drilling will support carbon-based energy prices going forward (in other words, if you own O&G assets, then ESG is your friend). With legendary investor Carl Icahn as its largest shareholder (he owns 13%) and Icahn’s former lieutenant. Jonathan Fretes as its board chairman, Sandridge did an admirable job steering the company away from the abyss of bankruptcy in April 2020 (when, recall, the price of oil dropped to NEGATIVE $40/bbl).
The company has cut unnecessary expenses to the bone (“high-grading” SD’s well inventory in fact, not just as a management talking point), thereby maximizing free cash flow conversion SD has also done a great job recompleting and reactivating dormant wells. SD’s annual PDP decline is expected (by the company) to remain in the single digits (%age annually) over the next 10 years.
In Q3, SD acquired additional production and acreage in the Western Anadarko basin (in Oklahoma) for a cost of $144MM, which is equal to 70% of their cash balance as of the end of Q1 2024 (see PR her). Should oil prices increase over the next 3-5 years, this acquisition should redound to SD’s benefit.”
A worker in protective gear near a large natural gas exploration machinery.
SandRidge Energy, Inc. (NYSE:SD) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held SandRidge Energy, Inc. (NYSE:SD) at the end of the third quarter which was 16 in the previous quarter. While we acknowledge the potential of SandRidge Energy, Inc. (NYSE:SD) 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 SandRidge Energy, Inc. (NYSE:SD) and shared Third Avenue Management’s views on the company. 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.