Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. 2025 got out to a solid start with the market hitting all-time highs in mid-February. However, a dramatic reversal pushed the S&P 500 down 8.7%, closing the quarter down 4.3%. During the quarter, the strategy returned -9.5% net of fees compared to the S&P 500’s -4.3% return. According to a three-factor performance attribution model, allocation and interaction effects contributed positively to the portfolio’s performance, which were partially offset by selection effects. In addition, you can check the fund’s top 5 holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Patient Capital Opportunity Equity Strategy highlighted stocks such as Seadrill Limited (NYSE:SDRL). Based in Hamilton, Bermuda, Seadrill Limited (NYSE:SDRL) offers offshore contract drilling services to the oil and gas industry. The one-month return of Seadrill Limited (NYSE:SDRL) was -19.40%, and its shares lost 58.37% of their value over the last 52 weeks. On April 23, 2025, Seadrill Limited (NYSE:SDRL) stock closed at $20.48 per share with a market capitalization of $1.27 billion.
Patient Capital Opportunity Equity Strategy stated the following regarding Seadrill Limited (NYSE:SDRL) in its Q1 2025 investor letter:
“Seadrill Limited (NYSE:SDRL) is the fourth largest pure play deepwater drilling specialist. The company emerged from bankruptcy in February 2022 with a net cash position and is positioned to benefit from limited supply and increasing demand in the deepwater drilling rig market. Nearly half of all deepwater drilling rigs worldwide were scrapped during the last decade, while industry consolidation has created a more rational competitive landscape than we’ve seen historically. Although oil demand has remained reasonably healthy, surprisingly strong onshore production from the USA, Canada and Russia has helped keep a lid on prices. While this has negatively impacted contract rates near-term, we believe that long-term future shale supply growth will be limited, and more offshore supply will be required benefitting offshore drillers. Given its highly specialized rig fleet and minimal debt, we believe the company is well positioned to benefit from improving prices when demand rebounds. We believe Seadrill could either lead industry consolidation or become an acquisition target.”
Drilling rig silhouetted against a setting sun in an offshore location.
Seadrill Limited (NYSE:SDRL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held Seadrill Limited (NYSE:SDRL) at the end of the fourth quarter, compared to 42 in the third quarter. While we acknowledge the potential of Seadrill Limited (NYSE:SDRL) 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 covered Seadrill Limited (NYSE:SDRL) and shared top stock picks from Paul Singer’s latest portfolio. In addition, please check out our hedge fund investor letters Q1 2025 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.