Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” fourth quarter 2023 investor letter. A copy of the same can be downloaded here. During the quarter the strategy returned 17.6% net of fees compared to the S&P 500’s 11.7% return. The portfolio’s outperformance can be attributed to a three-factor model, where interaction, selection, and allocation effects all played a significant role. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Patient Capital Management featured stocks such as K Kosmos Energy Ltd. (NYSE:KOS) in the fourth quarter 2023 investor letter. Headquartered in Dallas, Texas, Kosmos Energy Ltd. (NYSE:KOS) explores and produces oil and gas properties along the Atlantic Margins. On January 30, 2024, Kosmos Energy Ltd. (NYSE:KOS) stock closed at $6.36 per share. One-month return of Kosmos Energy Ltd. (NYSE:KOS) was -7.42%, and its shares lost 18.25% of their value over the last 52 weeks. Kosmos Energy Ltd. (NYSE:KOS) has a market capitalization of $2.926 billion.
Patient Capital Management stated the following regarding Kosmos Energy Ltd. (NYSE:KOS) in its fourth quarter 2023 investor letter:
“Kosmos Energy Ltd. (NYSE:KOS) declined from the high seen at the end of September following energy prices lower. The company was also hit as they marginally increased CAPEX expectations and hinted at the potential for their first gas delivery out of Tortue being delayed to 2Q24 from 1Q. Kosmos is an exploration and production services company with assets in Africa. The company is differentiated in the Exploration & Production space because of its growth profile (+30% YoY in 2024), long reserve life (>20yrs, nearly double the sector average) and focus on liquified natural gas (LNG). While the market is focused on near-term risk of production delays, we believe it is ignoring the long-term value of the underlying assets. As we move into 2024, production should inflect higher, climbing 30% YoY, while CAPEX comes down, declining 20% YoY. Together this leads to attractive growth and free cash flow generating asset providing the company the ability to pay down their debt and to return capital. At these levels, the company will generate more than its current market cap in FCF over the next 5 years at $90 Brent prices. With the combination of gas-heavy reserves and inflecting cash flow generation, we think Kosmos is significantly undervalued and a potential acquisition target.”
A drilling platform in the middle of the ocean, showing the oil and gas exploration process.
Kosmos Energy Ltd. (NYSE:KOS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Kosmos Energy Ltd. (NYSE:KOS) at the end of third quarter which was 21 in the previous quarter.
We discussed Kosmos Energy Ltd. (NYSE:KOS) in another article and shared the list of cheap energy stocks to buy. In addition, please check out our hedge fund investor letters Q4 2023 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.
