Should You Consider Adding RPC (RES) to Your Portfolio?

Palm Valley Capital Management, an investment management firm, released the “Palm Valley Capital Fund” second quarter 2025 investor letter. A copy of the letter can be downloaded here.  In the second quarter, Palm Valley Capital Fund appreciated 0.82% compared to a 4.90% gain for the S&P SmallCap 600 and a 7.28% rise in the Morningstar Small Cap Total Return Index. Cash was 76.7% of Fund assets at the start of the quarter and 73.6% at the conclusion. Year-to-date, the fund gained 1.39% compared to a 4.46% decline for the S&P SmallCap 600 and a 0.75% rise for the Morningstar Small Cap Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second quarter 2025 investor letter, Palm Valley Capital Fund highlighted stocks such as RPC, Inc. (NYSE:RES). RPC, Inc. (NYSE:RES) offers a range of oilfield services and equipment for the oil and gas companies. The one-month return of RPC, Inc. (NYSE:RES) was 3.64%, and its shares lost 10.31% of their value over the last 52 weeks. On July 7, 2025, RPC, Inc. (NYSE:RES) stock closed at $5.13 per share, with a market capitalization of $1.131 billion.

Palm Valley Capital Fund stated the following regarding RPC, Inc. (NYSE:RES) in its second quarter 2025 investor letter:

“The Fund acquired four new names during the second quarter: Healthcare Services Group (ticker: HCSG), Chord Energy (ticker: CHRD), RPC, Inc. (NYSE:RES), and Papa John’s International (ticker: PZZA).

With energy prices falling sharply early in the quarter, we also purchased RPC, Inc. Founded in 1984, RPC is an energy service company specializing in pressure pumping, downhole tools, coiled tubing, and cementing. Customers include major multinational and independent oil and gas producers. RPC has an extremely strong balance sheet with no debt and over $300 million in cash. While its industry is very cyclical, we believe its financial strength and modern equipment will allow it to survive and take market share during periods of declining drilling activity. While the U.S. oil rig count is down, industry production has grown through increased efficiency and processing a backlog of uncompleted wells. Yet, we may be approaching a cresting of domestic oil production without more investment in services.”

Is RPC, Inc. (RES) the Best Oil and Gas Penny Stock to Invest in Now?

A pressure pumping machine at the centre of an oilfield, surrounded by a team of workers in the field.

RPC, Inc. (NYSE:RES) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held RPC, Inc. (NYSE:RES) at the end of the first quarter, compared to 16 in the previous quarter. In the first quarter of 2025, RPC, Inc.’s (NYSE:RES) revenues decreased 1% sequentially to $333 million. While we acknowledge the potential of RPC, Inc. (NYSE:RES) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered RPC, Inc. (NYSE:RES) and shared the list of best oil and gas penny stocks to invest in. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of RES as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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