Why One Fund Ditched Viper Energy in a $12 Million Exit Amid a 20% Stock Slide
Key Points
Michigan-based Nemes Rush Group sold 319,503 shares of Viper Energy in the third quarter.
The position was worth an estimated $12.18 million as of the previous period.
The move marked an exit for Nemes Rush, which reported holding no VNOM shares as of September 30.
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On November 13, Michigan-based Nemes Rush Group disclosed it sold out its entire position in Viper Energy (NASDAQ:VNOM), reducing holdings by 319,503 shares worth an estimated $12.18 million.
What Happened
According to a Securities and Exchange Commission (SEC) filing dated November 13, Nemes Rush Group sold all 319,503 shares of Viper Energy (NASDAQ:VNOM) during the third quarter. The estimated transaction value was approximately $12.18 million based on average quarterly pricing.
What Else to Know
The fund's VNOM stake previously comprised 1.33% of reportable AUM.
Top holdings after the filing:
- NASDAQ:AVGO: $55.44 million (5.5% of AUM)
- NASDAQ:AAPL: $52.14 million (5.2% of AUM)
- NASDAQ:MSFT: $42.41 million (4.2% of AUM)
- NASDAQ:GOOGL: $38.28 million (3.8% of AUM)
- NASDAQ:NVDA: $37.42 million (3.7% of AUM)
As of Monday, Viper Energy shares were priced at $38.48, down 20% over the past year and well underperforming the S&P 500, which is instead up about 15.5% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $1.19 billion |
| Net income (TTM) | $243.66 million |
| Dividend yield | 5.5% |
| Price (as of Monday) | $38.48 |
Company Snapshot
- Viper Energy owns and manages mineral interests in oil and natural gas properties, primarily in the Permian Basin and Eagle Ford Shale
- The company generates revenue from royalties on hydrocarbon production
- It operates as a subsidiary of Diamondback Energy
Viper Energy focuses on acquiring and managing mineral rights in key U.S. oil and gas basins, enabling participation in upstream production economics while minimizing capital expenditures and operational risks. The company’s business model is based on collecting royalties from operators extracting oil and gas on its acreage.
Foolish Take
What makes this exit worth watching is not the size of the sale but what it signals about investor tolerance for volatility in income-focused energy plays. Viper Energy is not a growth stock -- it’s a royalty business designed to convert commodity exposure into cash flow, dividends, and buybacks. That model has worked operationally, but the share price recently has not worked out so well.
In the third quarter, Viper produced more than 108,000 barrels of oil equivalent per day and generated $165 million in pro forma cash available for distribution. It returned 85% of that cash to shareholders through a $0.58 combined base and variable dividend and $90 million in buybacks. That translated into an annualized yield north of 6% at recent prices. At the same time, reported results showed a net loss driven by non-cash impairment charges tied to asset transfers, not underlying operating weakness.
For a diversified fund, trimming or fully exiting a sub 2% position after a sharp drawdown can be a portfolio hygiene move rather than a fundamental call, and that may be what long-term investors should most keep in mind here.
Glossary
Assets under management (AUM): The total market value of investments managed by a fund or investment firm.
13F reportable assets: Securities that institutional investment managers must disclose quarterly to the SEC if over a certain threshold.
Liquidated: Sold off an entire investment position, reducing holdings to zero.
Dividend yield: Annual dividends paid by a company divided by its share price, shown as a percentage.
Trailing twelve months (TTM): Financial data covering the most recent 12 consecutive months.
Mineral interests: Ownership rights to minerals (like oil or gas) beneath land, often generating royalties.
Royalties: Payments made to mineral rights owners based on production or revenue from resource extraction.
Upstream production: The exploration and extraction phase of oil and gas operations, before refining or distribution.
Capital expenditures: Funds used by a company to acquire or upgrade physical assets such as property or equipment.
Operational risks: Potential losses resulting from failed internal processes, systems, or external events.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, Microsoft, and Nvidia. The Motley Fool recommends Broadcom and Viper Energy and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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