Palm Valley Capital Management, an investment management firm, has issued the second-quarter 2026 investor letter for the "Palm Valley Capital Fund." A copy of the letter can be downloaded here. In the second quarter, the fund's investor class gained 1.80%, while the S&P SmallCap 600 rose 19.7% and the Morningstar Small Cap Total Return Index returned 14.0%. The Strategy primarily focused on small-cap categories, allocating 75% to cash equivalents. This led to underperformance relative to benchmarks. The Fund is currently seeking more small-cap opportunities that meet its return criteria and will act swiftly if market conditions improve. The Index benefited from strong contributions from data center construction and biotech sectors, while the energy industry lagged. Additionally, reviewing the fund's top five holdings can reveal its best investments in 2026.
In its second-quarter 2026 investor letter, Palm Valley Capital Management highlighted Chord Energy Corporation (NASDAQ:CHRD). Chord Energy Corporation (NASDAQ:CHRD) is a leading US-based independent exploration and production company that engages in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids. On July 7, 2026, Chord Energy Corporation (NASDAQ:CHRD) closed at $116.84 per share. One-month return of Chord Energy Corporation (NASDAQ:CHRD) was -15.49%, and its shares gained 9.28% over the past 52 weeks. Chord Energy Corporation (NASDAQ:CHRD) has a market capitalization of $6.57 billion.
Palm Valley Capital Management stated the following regarding Chord Energy Corporation (NASDAQ:CHRD) in its Q2 2026 investor letter:
"The stocks most negatively affecting the Fund's second quarter return were Amdocs (ticker: DOX), LKQ (ticker: LKQ), and Chord Energy Corporation (NASDAQ:CHRD). Chord Energy was also a bottom contributor in the quarter. Although Chord reported solid first quarter results and raised its 2026 production guidance, this was overshadowed by the broader selloff in energy stocks driven by falling oil prices after geopolitical tensions eased."
Chord Energy Corporation (NASDAQ:CHRD) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 46 hedge fund portfolios held Chord Energy Corporation (NASDAQ:CHRD) at the end of the first quarter, up from 45 in the previous quarter. While we acknowledge the potential of Chord Energy Corporation (NASDAQ:CHRD) 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.