Aristotle Capital Management, LLC, an investment management company, released its “Value Equity Fund” first-quarter 2026 investor letter. A copy of the letter can be downloaded here. During the first quarter, the U.S. equity market declined, with the S&P 500 Index falling by 4.33%. The fixed-income sector also saw a downturn; the Bloomberg U.S. Aggregate Bond Index fell by 0.05%. In terms of investment styles, the value outperformed growth. Macroeconomic conditions indicated a slowdown in growth while inflationary pressures persisted. Additionally, geopolitical events contributed to heightened volatility during this period. For the first quarter of 2026, the Aristotle Value Equity Fund (Class I-2) recorded a total return of -2.23%, underperforming the Russell 1000 Value Index’s return of 2.10% but outperforming the S&P 500 Index’s return of -4.33%. In this challenging environment, the firm remains focused on what it considers to be more assessable and sustainable: the long-term fundamentals of individual businesses. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Aristotle Value Equity Strategy highlighted stocks like Coterra Energy Inc. (NYSE:CTRA). Coterra Energy Inc. (NYSE:CTRA) is a leading independent oil and gas company that explores, develops, and produces oil, natural gas, and natural gas liquids. On May 6, 2026, Coterra Energy Inc. (NYSE:CTRA) closed at $32.56 per share. One-month return of Coterra Energy Inc. (NYSE:CTRA) was -2.75%, and its shares gained 40.83% over the past 52 weeks. Coterra Energy Inc. (NYSE:CTRA) has a market capitalization of $24.73 billion.
Aristotle Value Equity Strategy stated the following regarding Coterra Energy Inc. (NYSE:CTRA) in its Q1 2026 investor letter:
“During the quarter, we sold our position in Coterra Energy Inc. (NYSE:CTRA) and purchased Chevron, McCormick & Company and Motorola Solutions. These purchases were funded through the sale of Coterra Energy, trims to Parker Hannifin and Atmos Energy for risk management purposes, as well as proceeds from the prior quarter sale of Constellation Brands.
We first invested in Coterra Energy, the Houston-based oil and natural gas producer, in the third quarter of 2019, when the company was known as Cabot Oil & Gas. Following its merger with Cimarex Energy in 2021, the company was renamed Coterra Energy, creating a more diversified operator with assets spanning the Marcellus, Permian and Anadarko basins. During our holding period, the company demonstrated strong operational execution across this asset base, supported by its low-cost structure and flexible capital allocation approach. It also improved efficiency and expanded takeaway capacity to access premium gas markets, while its balanced exposure to oil and natural gas helped it navigate commodity cycles more effectively than many peers. As the company transitions to its next phase following the recently announced all-stock merger with Devon Energy, Coterra will become a larger, more Delaware Basin-focused U.S. shale producer. While we see potential for synergies, we believe these benefits will take time to materialize. We therefore exited the position and reallocated capital to Chevron while continuing to monitor the progress of the combined company as integration efforts unfold.”
Coterra Energy Inc. (NYSE:CTRA) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 45 hedge fund portfolios held Coterra Energy Inc. (NYSE:CTRA) at the end of the fourth quarter, compared to 47 in the previous quarter. While we acknowledge the risk and potential of Coterra Energy Inc. (NYSE:CTRA) 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 Coterra Energy Inc. (NYSE:CTRA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Coterra Energy Inc. (NYSE:CTRA) and shared the list of all-time high but still undervalued stocks to invest in. 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.
