Hotchkis & Wiley, an investment management company, released its first-quarter 2026 investor letter for the “Hotchkis & Wiley Mid-Cap Value Fund.” A copy of the letter can be downloaded here. In the first quarter, geopolitical instability and AI-focused investments were the key market drivers. The energy sector significantly benefited from the Brent crude oil surge due to U.S.-Israel strikes on Iran. The Hotchkis & Wiley Mid-Cap Value Fund outperformed the Russell Midcap Value Index, mainly due to strong stock selection in energy, which returned 79% compared to 37% for the index. The Fund delivered a return of 6.74% in Q1 Vs. 3.68% return for the index. While stock selection in technology, healthcare, and consumer discretionary negatively impacted overall performance. The firm remains focused on its disciplined and long-term investment approach. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Hotchkis & Wiley Mid-Cap Value Fund highlighted stocks like APA Corporation (NASDAQ:APA). as a notable contributor. APA Corporation (NASDAQ:APA) engages in oil and natural gas exploration, development, and production. On April 23, 2026, APA Corporation (NASDAQ:APA) closed at $38.66 per share. One-month return of APA Corporation (NASDAQ:APA) was -12.91%, and its shares gained 136.45% over the past 52 weeks. APA Corporation (NASDAQ:APA) has a market capitalization of $13.66 billion.
Hotchkis & Wiley Mid-Cap Value Fund stated the following regarding APA Corporation (NASDAQ:APA) in its Q1 2026 investor letter:
“APA Corporation (NASDAQ:APA) is an independent E&P operating in the Midland and Delaware basins of the Permian and onshore Egypt, with exploration potential in Suriname, that trades at a discount despite lucrative natural gas financial contracts. We own APA for exposure to an energy market generating significant free cash flow in a perennially undersupplied environment. APA outperformed in the first quarter as oil prices surged following the Strait of Hormuz closure and the US-Israel conflict with Iran, with Brent crude peaking near $127. The company’s natural gas financial contracts—which capture differentials between Waha, the Houston Ship Channel, Henry Hub, and global LNG—became significantly more valuable as supply disruptions drove wider basis differentials.”
APA Corporation (NASDAQ:APA) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 41 hedge fund portfolios held APA Corporation (NASDAQ:APA) at the end of the fourth quarter, up from 33 in the previous quarter. While we acknowledge the risk and potential of APA Corporation (NASDAQ:APA) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than APA Corporation (NASDAQ:APA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered APA Corporation (NASDAQ:APA) and shared the list of best cheap dividend stocks to buy. In addition, please check out our hedge fund investor letters Q1 2026 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.
