Should You Consider Investing in Magnolia Oil and Gas Corp. (MGY)?

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ClearBridge Investments, an investment management firm, published its “Small Cap Strategy” third quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Small Cap Strategy underperformed the Russell 2000 Index, the Strategy’s benchmark, during the third quarter. On an absolute basis, the Strategy posted losses in nine of 11 sectors in which it was invested for the quarter. The primary contributor to the Strategy’s performance was the IT sector. The consumer discretionary and health care sectors were the main detractors of performance. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

ClearBridge Investments Small Cap Strategy, in its Q3 2021 investor letter, mentioned Magnolia Oil & Gas Corporation (NASDAQ: MGY) and discussed its stance on the firm. Magnolia Oil & Gas Corporation is a Houston, Texas-based oil and natural gas company with a $3.4 billion market capitalization. MGY delivered a 165.30% return since the beginning of the year, while its 12-month returns are up by 154.48%. The stock closed at $18.73 per share on December 24, 2021.

Here is what ClearBridge Investments Small Cap Strategy has to say about Magnolia Oil & Gas Corporation in its Q3 2021 investor letter:

“We did find the opportunity to add to our energy holdings during the quarter, with the addition of Magnolia Oil & Gas, a low-cost producer that has always run with no debt and measured depletion. But, as long as it’s “risk-on” in the oil patch, it will remain difficult to keep up with the highly levered, high-beta names.”


Based on our calculations, Magnolia Oil & Gas Corporation (NASDAQ: MGY) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. MGY was in 28 hedge fund portfolios at the end of the third quarter of 2021, compared to 19 funds in the previous quarter. Magnolia Oil & Gas Corporation (NASDAQ: MGY) delivered an 8.39% return in the past 3 months.

Earlier this year, we also shared another hedge fund’s views on MGY in another article. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.

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