Is Chord Energy (CHRD) an Attractively Valued Stock?

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 Chord Energy Corporation (NASDAQ:CHRD). Headquartered in Houston, Texas, Chord Energy Corporation (NASDAQ:CHRD) is an independent production and exploration company. The one-month return of Chord Energy Corporation (NASDAQ:CHRD) was 3.60%, and its shares lost 38.61% of their value over the last 52 weeks. On July 7, 2025, Chord Energy Corporation (NASDAQ:CHRD) stock closed at $103.13 per share, with a market capitalization of $5.956 billion.

Palm Valley Capital Fund stated the following regarding Chord Energy Corporation (NASDAQ:CHRD) in its second quarter 2025 investor letter:

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

Chord Energy is an exploration and production (E&P) company in the Williston Basin. As oil prices fell sharply in April, Chord’s stock fell below our valuation of the firm’s proven reserves. We’re fond of Chord’s strong balance sheet, free cash flow, and low-cost oil reserves. In 2024, the company generated $2.35 billion of EBITDA and $1 billion of free cash flow. Since the majority of Chord’s $800 million in debt doesn’t mature until 2033, we believe free cash flow will continue to be used to pay dividends and repurchase stock. Since 2021, Chord has paid $56 per share in dividends (over half the current share price!). With a market cap near $5 billion, we believe Chord is attractively priced relative to cash flow and our net asset valuation."

Chord Energy Corporation (NASDAQ:CHRD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held Chord Energy Corporation (NASDAQ:CHRD) at the end of the first quarter, compared to 56 in the previous quarter. While we acknowledge the potential of Chord Energy Corporation (NASDAQ:CHRD) 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 Chord Energy Corporation (NASDAQ:CHRD) and shared the list of best natural gas stocks to buy according to analysts. 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 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.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

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