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Independent Producers See Institutional Investors Bail Out in Q1

June 01, 2020, 09:00 AM
Filed Under: Energy

As the stocks of oil and gas producers endured major selloffs in the first quarter, the sellers included a large number of institutional investors, with a number seeing a declines of millions of shares, according to recent filings with the SEC, S&P Global Market Intelligence reports.

Occidental Petroleum Corp. saw a decline of 1.5% in institutional investor ownership, or a cut of 10.4 million shares. Franklin Resources Inc. reduced its stake by nearly 98%, or approximately 27.6 million shares, while SunAmerica Asset Management LLC sold off more than 95%, or 6.9 million shares. Adding insult to injury, the institutional investor with the most shares purchased was none other than the arch-nemesis of CEO Vicki Hollub and Occidental's management team, Carl Icahn. Icahn Capital LP purchased more than 66 million shares of Occidental stock during the first quarter, increasing his stake in the company to 9.9% of all shares traded.

Ovintiv Inc. saw institutional investor holdings plunge during the first quarter, falling approximately 26.5%. Three major investors ? Causeway Capital Management LLC, Wellington Management Group LLP and Vanguard Group ? sold off more than 80% of their positions in the company, totaling more than 48 million shares. The company's largest buyer in the quarter was newcomer FIL Ltd., which bought approximately 10.4 million shares.

Permian Basin powerhouse Diamondback Energy Inc. saw its institutional investor holdings decline by 8.1 million shares, or 5.2%. Ceredex Value Advisors LLC sold its entire 2.1 million share stake in Diamondback, while frequent buyer Capital Research & Mgmt Co. sold off approximately 15.7%, or 3.9 million shares. Capital Research and Management still holds more than 13.2% of Diamondback's stock, or a position worth more than $550 million.

Marathon Oil Corp. saw its institutional investor holdings decline by 22.7 million shares, or 3.4%, during the first quarter. The biggest seller was Macquarie Investment Management Business Trust, which sold approximately 29.3 million shares, or over 44.2% of its total stake in the company. On the positive side, FMR LLC increased its position in Marathon by more than 292% as it added 7.5 million shares during the quarter.

While the majority of independents saw a net loss in shares held by institutional investors during the first quarter, a few bucked the trend. Pioneer Natural Resources Co.'s institutional ownership increased by 1.4%, or 2.1 million shares, thanks largely to purchases made by two newcomers. Citadel Advisors LLC purchased 1.3 million shares, worth $91.3 million, while Menora Mivtachim Mutual Funds Ltd. bought a million shares worth $73.2 million.

Citadel Advisors also bought an initial stake in EOG Resources Inc. of 2.7 million shares, worth $96.9 million. The biggest buyer, however, was Capital Research and Management, which purchased approximately 14.3 million shares and now holds more than 20% of EOG's outstanding stock. That led to a 0.1% increase in institutional investor holdings in the company, in spite of three firms ? FMR LLC, Barrow Hanley Mewhinney & Strauss LLC and Janus Henderson Group PLC ? selling 83%, 99.8% and 94.9%, respectively, of their positions in EOG.

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