Diamond Hill Capital, an investment management firm, has released its Small Cap Fund investor letter for the second quarter of 2024. A copy of it can be downloaded here. Equity markets reported mixed results in the second quarter of 2024. However, the broad market, the Russell 3000 Index, and the large-cap-focused Russell 1000 Index gained about 3%, with most other market segments posting negative returns. The Diamond Hill Small Cap Fund slightly underperformed its benchmark, the Russell 2000 Index, in the second quarter, returning -3.42%, while the benchmark return was -3.28% over the same period. For more on the fund’s top picks in 2024, see its top five holdings.
Diamond Hill Small Cap Fund highlighted stocks like Magnolia Oil & Gas Corporation (NYSE:MGY) in its Q2 2024 investor letter. Magnolia Oil & Gas Corporation (NYSE:MGY) is an independent oil and natural gas company. Magnolia Oil & Gas Corporation (NYSE:MGY)’s one-month return was -8.44%, and its shares gained 5.54% of their value over the past 52 weeks. On August 7, 2024, Magnolia Oil & Gas Corporation (NYSE:MGY) stock closed at $23.99 per share with a market cap of $4.777 billion.
Diamond Hill Small Cap Fund stated the following about Magnolia Oil & Gas Corporation (NYSE:MGY) in its second quarter 2024 investor letter:
“We continue to find attractively valued, resilient companies that the market is overlooking due to its increasingly narrow focus on the mega-cap technology stocks that dominate the major indices. In the second quarter, we initiated new positions in Magnolia Oil & Gas Corporation (NYSE:MGY), Thermon Group Holdings and Astrana Health.
Magnolia Oil & Gas is a small-cap exploration and production company based in the Eagle Ford shale region. The company has a strong and experienced management team with a disciplined capital allocation framework, ownership mentality and a strong balance sheet. In addition, the company’s low breakeven numbers and low debt make it an attractive, relatively low-risk opportunity to profit from the uptrend of the commodity cycle.”
Aerial view of an oil and gas drilling rig on a leased property.
Magnolia Oil & Gas Corporation (NYSE:MGY) is not on our list of the 31 most popular stocks among hedge funds. According to our database, 24 hedge fund portfolios held Magnolia Oil & Gas Corporation (NYSE:MGY) at the end of the first quarter, up from 25 in the previous quarter. In the second quarter, Magnolia Oil & Gas Corporation (NYSE:MGY) reported GAAP net income attributable to Class A common stock of $96 million and adjusted total net income of $104 million, or $0.52 per diluted share. While we recognize the potential of Magnolia Oil & Gas Corporation (NYSE:MGY) as an investment, we believe AI stocks promise higher returns and do so in a shorter period of time. If you are looking for an AI stock that is as promising as NVIDIA but trades at less than 5 times earnings, read our report on the cheapest AI stock.
In another article, we discussed Magnolia Oil & Gas Corporation (NYSE:MGY) and published the list of oil stocks with the most upside potential. You can also find more investor letters from hedge funds and other leading investors on our Hedge Fund Investor Letters Q2 2024 page.
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Disclosure: None. This article was originally published at Insider Monkey.
