L1 Capital, an investment management firm, released its "L1 Long Short Fund" second-quarter 2026 investor letter. A copy of the letter can be downloaded here. The market's main themes in the June quarter were the Iran conflict and developments in the AI sector. These trends shifted after oil prices declined due to a ceasefire agreement, leading to a reversal. AI stocks surged, driven by strong earnings, rapid capital investment, and critical supply shortages. During this period, the L1 Long Short Fund achieved notable gains, rising 12.7% compared to the ASX200AI's 4.0%, with year-to-date returns at 12.5% versus 2.4%. U.S. equities outperformed, especially those benefiting from AI-related capital expenditure. The firm is satisfied with the portfolio's positioning, emphasizing strong medium-term growth potential, supported by attractive valuations, solid earnings, and robust cash flow. In addition, you can check the Fund's top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, L1 Long Short Fund highlighted Nexgen Energy Ltd. (NYSE:NXE). Nexgen Energy Ltd. (NYSE:NXE) is an exploration and development stage company that engages in the acquisition, exploration, evaluation, and development of uranium properties in Canada. On July 17, 2026, NexGen Energy Ltd. (NYSE:NXE) closed at $8.80 per share, reflecting a market capitalization of $5.83 billion. NexGen Energy Ltd. (NYSE:NXE) posted a one-month return of -15.79%, while its shares gained 28.28% over the past 52 weeks.
L1 Long Short Fund stated the following regarding NexGen Energy Ltd. (NYSE:NXE) in its Q2 2026 investor update:
"A key stock detractor for the June quarter was: NexGen Energy Ltd. (NYSE:NXE) (Long -17%) declined alongside the broad uranium complex, driven by general risk-off sentiment in the commodities space. Despite the equity volatility, spot uranium prices increased modestly (+1.5%). NexGen is preparing to develop the world's largest undeveloped uranium deposit, Arrow, located in Saskatchewan, Canada, which will be a new major strategic Western source of uranium to address the looming market deficit. The company received final regulatory approvals in March 2026 and is preparing to commence full-scale project construction, with an estimated 4-year construction timeline. Once developed, Arrow has the potential to generate ~C$2.8b of EBITDA annually, assuming a US$80/lb uranium price (below current spot prices). We believe this is a highly compelling proposition given NexGen's current market cap of only ~C$8.8b."
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