Here’s Why Palm Valley Capital Sold its Coterra Energy (CTRA) Shares

Palm Valley Capital Management, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. Two-thirds of the non-financial members in the Russell 2000 Index are either unprofitable or trade above 20x EV/EBIT. The median EBIT growth since 2019 for small caps in the sub 10x EV/EBIT bucket is an astonishing 194%. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q2 2022 investor letter, Palm Valley Capital Fund mentioned Coterra Energy Inc. (NYSE:CTRA) and explained its insights for the company. Founded in 1989, Coterra Energy Inc. (NYSE:CTRA) is a Houston, Texas-based energy company with a $21.6 billion market capitalization. Coterra Energy Inc. (NYSE:CTRA) delivered a 41.68% return since the beginning of the year, while its 12-month returns are up by 66.58%. The stock closed at $26.92 per share on July 15, 2022.

Here is what Palm Valley Capital Fund has to say about Coterra Energy Inc. (NYSE:CTRA) in its Q2 2022 investor letter:

“We sold two Fund positions during the quarter which includes Coterra Energy (NYSE:CTRA). As a result of surging oil and natural gas prices, Coterra reached our valuation, and we exited the position in April.”

Photo by Jason Blackeye on Unsplash

Our calculations show that Coterra Energy Inc. (NYSE:CTRA) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Coterra Energy Inc. (NYSE:CTRA) was in 39 hedge fund portfolios at the end of the second quarter of 2022, compared to 37 funds in the previous quarter. Coterra Energy Inc. (NYSE:CTRA) delivered a -8.50% return in the past 3 months.

In July 2022, we also shared another hedge fund’s views on Coterra Energy Inc. (NYSE:CTRA) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

Disclosure: None. This article is originally published at Insider Monkey.