Hahn Capital Management LLC has made a bold and surprising move in their investment strategy by lifting their stake in Occidental Petroleum Co. by 67.1% during the first quarter, according to the company’s recent filing with the Securities & Exchange Commission. The firm now owns 215,870 shares of the oil and gas producer’s stock after purchasing an additional 86,721 shares during the quarter. This makes Occidental Petroleum Comprise about 4.4% of Hahn Capital Management LLC’s investment portfolio, making it the sixth largest position in its portfolio.
Occidental Petroleum’s shareholders will be pleased to note that recently they disclosed a quarterly dividend on Friday July 14th; shareholders recorded on Friday June 9th will receive $0.18 per share worth of dividends. The ex-dividend date is Thursday, June 8th, and this represents a historically impressive $0.72 annualized dividend giving shareholders an attractive yield at present rates of approximately 1.28%. Presently, Occidental Petroleum’s payout ratio is quite steady at roughly 8.25%.
Several research firms have given reports on OXY since Hahn Capital Management’s bold announcement, including Barclays who increased their price objective to $78.00 from $70.00 in March, TD Cowen upgraded shares from a “market perform” rating to an “outperform” rating and upped their target price for the company from $63.00 to $70.00 in a report on Tuesday, March 28th amongst others like Raymond James that gave shares of Occidental Petroleum Company strong buy ratings through an increase in price objectives that went from levels below current prices such as Wells Fargo & Company which raised its target price objective from $64 to $65.
However not all reports hold the company in high regard: StockNews.com lowered shares of Occidental Petroleum from a “hold” rating to a “sell” rating in a report on Thursday, May 11th. The rating agency took this action despite the company still holding overall sound consensus ratings of “Hold” as reported by Bloomberg with an average price target of $70.19.
The question analysts are thus asking is whether Hahn Capital Management LLC’s bold move in Occidental Petroleum will pay off or prove unwise? Only time can tell now that the die has been cast.
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Occidental Petroleum: Changes in Shareholder Composition and Low EPS Expectations
Occidental Petroleum, the oil and gas producing company, has recently seen changes in its shareholder composition as institutional investors and hedge funds have made adjustments to their positions in the stock. Charles Schwab Investment Management Inc. raised its stake by 2.4% during the first quarter, while Moneta Group Investment Advisors LLC purchased a new position during the fourth quarter valued at around $267,173,000. Furthermore, First Trust Advisors LP lifted its holdings by 3.1% in Occidental Petroleum during the same period of time.
Institutional investors seem to prefer investing in Occidental Petroleum as 78.31% of its stock is owned by them along with hedge funds. The ownership structure was further boosted recently when Berkshire Hathaway Inc acquired approximately one million shares of Occidental Petroleum worth over $58 million.
The acquisition comes following the release of the company’s quarterly report which indicated that earnings per share (EPS) from Q1 were lower than expected at $1.09 (compared to estimates of $1.30), marking a decrease in revenue from previous quarters.
Despite lower EPS figures, Occidental Petroleum has decided to pay shareholders a quarterly dividend of 18 cents per share on July 14th, with dividends averaging at an annualized rate of around 0.72%, yielding roughly 1.28%.
Trading opened on Monday with shares priced at $56.11; however, this was slightly down from last months’ fifty day simple moving average and two hundred day simple moving average which were recorded at $59.35 and $61.45 respectively.
For now shareholders will be waiting to see how the company performs for this year as things may not be looking too bright given that expectations are currently set very low for EPS growth during this year – which is penciled in at just 4.84%.