Oil Prices and CEO Change Weighed on Occidental, Investor Letter Says
Cooke & Bieler named Occidental its largest detractor, citing falling crude prices, its production mix and a leadership transition.
Occidental Petroleum was the largest detractor from performance for Cooke & Bieler’s Mid Cap Value Strategy in the second quarter, the firm said in its investor letter. The firm cited lower oil prices and the company’s CEO transition.
Cooke & Bieler said easing geopolitical tensions in June pushed oil prices down and weighed on exploration and production stocks. Crude oil made up 51% of Occidental’s production, bringing additional pressure on the shares as fears of supply disruptions eased.
The letter said Occidental’s U.S. positioning made it less vulnerable than competitors to disruptions in the Strait of Hormuz. The company also reported better-than-expected first-quarter production and guided to stable volumes for the rest of the year.
Cooke & Bieler’s strategy returned 8.05% for the quarter, compared with 13.4% for the Russell Midcap Value Index. The firm attributed nearly all of the shortfall to its underweight in information technology, a sector it said surged 60% on AI capital spending.
This article was produced with the help of AI technology.
Source: Yahoo Finance
