Reasons to Invest in Chord Energy (CHRD)
Madison Investments, an investment advisor, released its “Madison Small Cap Fund” fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. The small-cap market rebounded in the fourth quarter, with the Russell 2000 Index rising 14%, following a benign inflation report in October. In the fourth quarter, the fund (Class Y) returned 11.2% underperforming the benchmark’s 14.0% return. The fund returned 16.1% YTD compared to a 16.9% return for the benchmark. The broader index, the Russell 2500, posted a 13.4% quarterly return and a 17.4% annual return. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Madison Small Cap Fund featured stocks such as Chord Energy Corporation (NASDAQ:CHRD) in its Q4 2023 investor letter. Headquartered in Houston, Texas, Chord Energy Corporation (NASDAQ:CHRD) is an independent production and exploration company. On January 16, 2024, Chord Energy Corporation (NASDAQ:CHRD) stock closed at $153.22 per share. One-month return of Chord Energy Corporation (NASDAQ:CHRD) was -7.94%, and its shares gained 14.10% of their value over the last 52 weeks. Chord Energy Corporation (NASDAQ:CHRD) has a market capitalization of $6.325 billion.
Madison Small Cap Fund stated the following regarding Chord Energy Corporation (NASDAQ:CHRD) in its fourth quarter 2023 investor letter:
"After carefully scouring the landscape for almost two years, we initiated a new position in Energy company Chord Energy Corporation (NASDAQ:CHRD). Chord is an exploration and production company and the product of a recent merger between Oasis and Whiting Petroleum. We have history as shareholders in the past in Whiting Petroleum and new management has already demonstrated its commitment to a shareholder return business model. We think the return to a single basin operating model plays to CHRD’s strength, as it enables the company to fully take advantage of its scale and size in the Bakken. The company is in a strong position to capitalize on upcoming value-enhancing opportunities in terms of basin consolidation, and so we expect CHRD to generate significant free cash flow over the next three years to fund an attractive 3% plus dividend yield. As we discussed earlier, Energy underperformed meaningfully in 2023 and so we exploited this opportunity to make our first energy investment in several years. We believe CHRD can generate positive economic returns with oil above $55, giving us a significant downside cushion to the commodity. From a portfolio perspective, we like the hedge Chord provides in a volatile geopolitical climate. Finally, Chord’s strong position in the Bakken makes it an attractive takeover target for larger integrated energy companies."
A vertical offshore oil rig in the middle of a calm sea, symbolizing the company's oil and gas exploration.
Chord Energy Corporation (NASDAQ:CHRD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held Chord Energy Corporation (NASDAQ:CHRD) at the end of third quarter which was 37 in the previous quarter.
We discussed Chord Energy Corporation (NASDAQ:CHRD) in another article and shared the list of stocks receiving price-target cut from analysts. In addition, please check out our hedge fund investor letters Q4 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.
