Diamondback Energy Benefits from Oil Price Surge

Yacktman Focused Fund's first-quarter 2026 investor letter reveals robust performance, significantly outperforming the Russell 1000® Value Index and the S&P 500 Index with a 10.37% return. The letter attributes much of this success to strategic investments in energy companies, notably Diamondback Energy, Inc. (NASDAQ: FANG), which benefited substantially from oil price fluctuations driven by Middle East geopolitical events. Despite ongoing market highs in the U.S. and no signs of an imminent slowdown, the fund maintains a disciplined, long-term approach, focusing on companies with strong risk-adjusted returns to navigate various market cycles. This strategy underscores the fund's commitment to delivering differentiated returns for its investors.

Diamondback Energy, Inc. (NASDAQ: FANG), a prominent player in the oil and natural gas sector, specializing in the acquisition, development, exploration, and exploitation of unconventional onshore reserves, has shown remarkable growth. As of May 22, 2026, its shares were valued at $200.71, marking a 2.18% increase over the past month and an impressive 47.73% gain over the previous 52 weeks. The company boasts a substantial market capitalization of $56.46 billion, reflecting its significant presence and influence in the energy market.

The Yacktman Focused Fund explicitly recognized Diamondback Energy's contribution to its first-quarter 2026 performance. Alongside other energy sector holdings such as Canadian Natural Resources Limited (CNQ), ConocoPhillips Company, and EOG Resources, Inc., Diamondback Energy was a key beneficiary of the heightened oil prices resulting from conflicts in the Middle East. The fund's decision in 2022 to augment its energy holdings, at a time when the sector's market capitalization was relatively small compared to the overall market, proved prescient. These energy investments were deliberately designed to act as a natural hedge against potential geopolitical risks, a strategy that has evidently paid off amidst recent global instability.

While Diamondback Energy, Inc. is a valuable asset within the fund's portfolio, it does not feature on the list of the 40 most popular stocks among hedge funds heading into 2026. This observation suggests that although its performance has been strong, other investment opportunities, particularly in emerging sectors like AI, are capturing broader attention among institutional investors. Nevertheless, Diamondback Energy's strategic position in the energy market and its recent financial gains highlight its resilience and potential in a volatile global economy.

The Yacktman Focused Fund's first-quarter 2026 results demonstrate the effectiveness of its strategic investment philosophy. By carefully selecting companies like Diamondback Energy and leveraging the hedging capabilities of the energy sector, the fund has successfully navigated a dynamic market landscape. This proactive and disciplined approach not only generated significant returns but also positioned the fund advantageously against unexpected geopolitical turbulence, reaffirming the importance of a robust, long-term investment strategy.