Praetorian Capital, an investment management company, released its second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund was down by 1.69% net of fees in the second quarter. The core portfolio positions had both profits and losses in the second quarter, but the Event-Driven book saw a decent return—even though it had to give back part of those gains in June. For more information on the fund’s top picks in 2024, please check its top five holdings.
Praetorian Capital highlighted stocks like Valaris Limited (NYSE:VAL), in the second quarter 2024 investor letter. Valaris Limited (NYSE:VAL) is an offshore contract drilling services provider. The one-month return of Valaris Limited (NYSE:VAL) was 10.69%, and its shares gained 6.44% of their value over the last 52 weeks. On July 23, 2024, Valaris Limited (NYSE:VAL) stock closed at $79.81 per share with a market capitalization of $5.779 billion.
Praetorian Capital stated the following regarding Valaris Limited (NYSE:VAL) in its Q2 2024 investor letter:
“Valaris Limited (NYSE:VAL) has been rangebound for over two years now, awaiting the signing of new contracts at current market rates, that will replace expiring contracts that are frequently less than half of current prevailing rates. There have been some questions as to why the company has been slow to sign new contracts. However, I believe that management is trying to trade a slightly reduced price for increased duration of contract tenure, and that’s the reason for a lack of commentary on new contracts. Should the company announce new contracts at anywhere near current market rates, I believe that the shares will respond in a rather dramatic way—especially as Valaris is by far the cheapest of the large drilling companies (based on the enterprise value per rig metric), despite having one of the best fleets and strongest balance sheets. Between our common and warrant position, Valaris was our 2nd largest position at the end of June.”
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Valaris Limited (NYSE:VAL) is not on our list of 31 Most Popular Stocks Among Hedge Funds. Valaris Limited (NYSE:VAL) was held by 43 hedge fund portfolios at the end of the first quarter, compared to 47 in the previous quarter, according to our database. The first quarter revenue of Valaris Limited (NYSE:VAL) was $525 million compared to $484 million in Q4 2023 and adjusted EBITDA was $54 million compared to $58 million in the previous quarter. While we acknowledge the potential of Valaris Limited (NYSE:VAL) 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 Valaris Limited (NYSE:VAL) and shared Praetorian Capital’s views on the company in the previous quarter. 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.
