Guru Steven Romick slashed his stake in Occidental Petroleum Corp. (OXY, Financial) during the second quarter. Romick sold 2,482,160 shares for an average price of $74.73. The trade had a -1.8% impact on his portfolio.
Occidental Petroleum Corporation is an international oil and gas exploration and production company headquartered in Houston. The company provides its services internationally with operations in the U.S., Middle East and Latin America. Occidental is one of the largest U.S. oil and gas companies, based on equity market capitalization.
Occidental Petroleum has a market cap of $59.13 billion, an enterprise value of $63.62 billion and a P/B ratio of 2.50.
GuruFocus gives Occidental Petroleum a 4/10 financial strength rating with a 4/10 profitability and growth rating. The company’s operating margin is -82.09 which ranks it below 55% of the 431 companies in the global oil and gas E&P industry.
Occidental Petroleum has four severe warning signs, according to GuruFocus, which may have had an influence on Romick's decision to trim 80% of his stake.
- Piotroski F-Score:Â Low. When the Piotroski F-Score of 3 is low, it usually implies poor business operation.
- Per share revenue:Â Declining. Occidental Petroleum's revenue has been in decline for the last five years.
- Gross margin:Â Declining. Occidental Petroleum's gross margin has been in long-term decline. The average rate of decline per year is -2.6%.
- Days inventory: Building. If a company builds inventory, it may mean it is having difficulty selling its goods.
It’s also possible Romick decided to trim his stake because of high volatility in the oil market. If oil prices continue to decline, so will the share price of Occidental Petroleum.
Romick is a Northwestern University graduate with a bachelor’s degree in education. Upon graduation, Romick began his investment career working as a security analyst for Kaplan, Nathan & Co. He then was given an opportunity to work for FPA Funds where he began to formulate his strategies as a defensive contrarian investor.
Romick is the portfolio manager of the FPA Contrarian Value Strategy Fund as well as the FPA Crescent Fund. Romick also serves as the portfolio manager for the FPA Hawkeye Strategy, co-portfolio manager for the FPA Multi-Advisor Strategy and portfolio manager for Source Capital Inc.
Cheers to your investment success.
Disclosure:Â Author does not own any shares of this company.
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