Choice Equities Capital Management, a hedge fund manager, recently released its second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund lost -5.8% on a net basis bringing year-to-date gain to +7.5% compared to the Russell 2000’s -3.3% loss for the quarter and +1.7% gain for YTD. Since its inception in 2017, the fund has generated annualized gains of +13.5% versus +7.1% and +14.6% returns for the indexes. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Choice Equities Fund highlighted stocks like Orion S.A. (NYSE:OEC), in the second quarter 2024 investor letter. Orion S.A. (NYSE:OEC) manufactures and distributes carbon black products. The one-month return of Orion S.A. (NYSE:OEC) was 15.32%, and its shares gained 15.91% of their value over the last 52 weeks. On July 31, 2024, Orion S.A. (NYSE:OEC) stock closed at $24.62 per share with a market capitalization of $1.436 billion.
Choice Equities Fund stated the following regarding Orion S.A. (NYSE:OEC) in its Q2 2024 investor letter:
“Orion S.A. (NYSE:OEC) – Shares of Orion were also down in the quarter, at a time when the company looks to be approaching an inflection in cash flow growth. If we are paying attention to capital cycle economics, as we should be, the company should be in excellent position going forward. After years of EPA-mandated investment to clean up its plants to manufacture carbon black with lower sulfur output, the company is now in a position to leverage these investments that have kept new competitors and capital flows disinterested from creating additional production capacity within the industry. From here, a strong case can be made for high teens or better EBITDA growth in coming years, an outlook that a valuation of <6x EBITDA appears to overly discount. As capital investments taper off, we believe many of those cash flows will returned to shareholders via buybacks.”
A laboratory scientist in a lab coat examining a beaker of high purity carbon black.
Orion S.A. (NYSE:OEC) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held Orion S.A. (NYSE:OEC) at the end of the first quarter which was 31 in the previous quarter. While we acknowledge the potential of Orion S.A. (NYSE:OEC) 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 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.
