Do You Believe in the Earnings Potential of Valaris (VAL)?

ClearBridge Investments, an investment management company, released its “ClearBridge Small Cap Value Strategy” second quarter 2023 investor letter. A copy of the same can be downloaded here. The strategy outperformed the Russell 2000 value Index in the second quarter. On an absolute basis, the strategy gained all 11 sectors it invested in during the quarter. IT and industrial sectors were the leading contributors while the utility sector detracted. Overall stock selection improved performance on a relative basis. In addition, please check the fund’s top five holdings to know its best picks in 2023.

ClearBridge Small Cap Value Strategy highlighted stocks like Valaris Limited (NYSE:VAL) in the second quarter 2023 investor letter. Headquartered in Hamilton, Bermuda, Valaris Limited (NYSE:VAL) provides offshore contract drilling services. On September 20, 2023, Valaris Limited (NYSE:VAL) stock closed at $74.77 per share. One-month return of Valaris Limited (NYSE:VAL) was 3.00%, and its shares gained 49.54% of their value over the last 52 weeks. Valaris Limited (NYSE:VAL) has a market capitalization of $5.532 billion.

ClearBridge Small Cap Value Strategy made the following comment about Valaris Limited (NYSE:VAL) in its Q2 2023 investor letter:

“We also added Valaris Limited (NYSE:VAL), in the energy sector, which provides offshore contract drilling services to the international oil and gas industry. We feel the offshore drilling market is materially tightening, the industry has undergone substantial consolidation, and the company’s free cash flow is set to rapidly rise over the next few years against the backdrop of higher competition. We believe Valaris offers a compelling valuation given the underestimation of the company’s earnings potential.”

Newpark Resources Inc (NR), NYSE:NR,

Valaris Limited (NYSE:VAL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held Valaris Limited (NYSE:VAL) at the end of second quarter which was 47 in the previous quarter.

We discussed Valaris Limited (NYSE:VAL) in another article and shared stock picks of activist billionaire Paul Singer in 2023. In addition, please check out our hedge fund investor letters Q2 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.