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Here’s Why Ariel Focus Fund Added Chevron Corporation (CVX)

Ariel Investments, an investment management company, released its “Ariel Focus Fund” third-quarter 2023 investor letter. A copy of the same can be downloaded here.  In the third quarter, the fund fell -5.87 % compared to a -3.16% and -3.27% decline for the Russell 1000 Value Index and the S&P 500 Index, respectively. Global markets fell in the third quarter. In this context, the government bond yield spiked, which put pressure on the equities and led the high values “magnificent seven” to lose their shine. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

Ariel Focus Fund highlighted stocks like Chevron Corporation (NYSE:CVX) in the third quarter 2023 investor letter. Headquartered in San Ramon, California, Chevron Corporation (NYSE:CVX) engages in in integrated energy and chemicals operations through its subsidiaries. On December 8, 2023, Chevron Corporation (NYSE:CVX) stock closed at $144.31 per share. One-month return of Chevron Corporation (NYSE:CVX) was 0.22%, and its shares lost 14.997% of their value over the last 52 weeks. Chevron Corporation (NYSE:CVX) has a market capitalization of $272.421 billion.

Ariel Focus Fund made the following comment about Chevron Corporation (NYSE:CVX) in its third 2023 investor letter:

"Also in the quarter, we initiated a position in Chevron Corporation (NYSE:CVX), the second largest integrated energy company in the U.S., operating in exploration, production and refining on a global scale. We view the company as competitively advantaged with a strong balance sheet, sustainable growth pathway and an effective management team. Going forward CVX expects improved cost efficiencies and production growth via its differentiated position in the Permian Basin and recent acquisition of Noble Energy. Additionally, management believes a combination of its new higher-margin projects along with operational improvements will drive a double-digit return of capital employed by 2027. Although oil and gas prices, which lay outside of the company’s control, ultimately dictate Chevron’s earnings and cashflow profile, the organization is laser focused on capital discipline. It is this lack of predictability, and potential fear of a global recession which presented us with an opportunity to initiate a position in this high barrier to entry producer at reasonable prices."

A tanker truck making its way through a refinery facility. .

Chevron Corporation (NYSE:CVX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held Chevron Corporation (NYSE:CVX) at the end of third quarter which was 73 in the previous quarter.

We discussed Chevron Corporation (NYSE:CVX) in another article and shared the list of dividend stocks according to billionaires. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.

 

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Disclosure: None. This article is originally published at Insider Monkey.

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