L1 Capital, an investment management firm, released its “L1 Long Short Fund” first quarter 2023 investor letter, a copy of the same can be downloaded here. The equity market was volatile in the first quarter and the fund returned 2.1% (net) compared to 3.5% for the S&P ASX200 Accum Index. In addition, please check the fund’s top 5 holdings to know about its top bets for 2023.
L1 Long Short Fund highlighted stocks like Cenovus Energy Inc. (NYSE:CVE) in the first quarter 2023 investor letter. Headquartered in Calgary, Canada, Cenovus Energy Inc. (NYSE:CVE) is an energy company. On April 21, 2023, Cenovus Energy Inc. (NYSE:CVE) stock closed at $17.50 per share. One-month return of Cenovus Energy Inc. (NYSE:CVE) was 7.69%, and its shares gained 6.38% of their value over the last 52 weeks. Cenovus Energy Inc. (NYSE:CVE) has a market capitalization of $33.521 billion.
L1 Long Short Fund made the following comment about Cenovus Energy Inc. (NYSE:CVE) in its Q1 2023 investor letter:
“The broad-based market sell-off in mid-March from the banking crisis allowed us the opportunity to add to several of our high conviction long positions at exceptional prices, including:
Cenovus Energy Inc. (NYSE:CVE): Shares fell by ~17% intra month, with the WTI oil price falling to US$66/bbl. We continue to remain positive on the outlook for Energy. Supply remains constrained with reduced capital investment and sustained declines in global inventories. Demand may see some negative impacts from a potential recession; however, we expect this to be mitigated by the likely recovery of Chinese consumption over the coming year.
Cenovus (Long -10%) shares declined due to WTI oil prices falling ~6% and refinery outages over the quarter. The banking crisis led to a collapse in oil prices to ~US$66/bbl in mid-March. We used the dislocation to add to our high conviction energy names, including Cenovus. Oil prices subsequently recovered to end the quarter at around US$75/bbl and have rallied further post the quarter end with OPEC+ announcing output cuts of 1.16 million barrels per day in early April. Cenovus continues to generate very strong free cash flow at current oil price levels, with the long-life nature of its oil sands assets and its low cost of production providing a break-even oil price at around ~US$40/bbl.”
Cenovus Energy Inc. (NYSE:CVE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held Cenovus Energy Inc. (NYSE:CVE) at the end of the fourth quarter which was 47 in the previous quarter.
We discussed Cenovus Energy Inc. (NYSE:CVE) in another article and shared the list of best undervalued energy stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q1 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.
