1. Shell plc (NYSE:SHEL)
Huber Capital Management’s Stake Value: $11,561,000
Percentage of Huber Capital Management’s 13F Portfolio: 2.98%
Number of Hedge Fund Holders: 33
Shell plc (NYSE:SHEL) is a global energy company that supplies crude oil, natural gas, and natural gas liquids. The company was formerly known as Royal Dutch Shell plc and changed its name to Shell plc (NYSE:SHEL) in January 2022. Huber Capital Management owns 259,400 Shell plc (NYSE:SHEL) shares as of Q3 2021, worth $11.5 million, representing 2.98% of the fund’s total 13F securities.
On February 4, Cowen analyst Jason Gabelman raised the price target on Shell plc (NYSE:SHEL) to $58 from $53 and kept an Outperform rating on the shares. The company is exploring ways to upgrade its cash return framework, which could come with the Q2 earnings, the analyst told investors in a research note.
Shell plc (NYSE:SHEL) on February 3 declared a $0.48 per share quarterly dividend, in line with previous. The dividend is payable on March 28, to shareholders of record on February 18. The company also announced share buybacks of $8.5 billion for H1 2022, including $5.5 billion of Permian divestment proceeds.
In Q3 2021, Pzena Investment Management was one of the biggest Shell plc (NYSE:SHEL) stakeholders, with a $179.6 million position in the company. Overall, 33 hedge funds were long Shell plc (NYSE:SHEL) in the third quarter of 2021, down from 38 funds in the prior quarter.
Here is what Goehring & Rozencwajg Associates has to say about Shell plc (NYSE:SHEL) in its Q3 2021 investor letter:
“Royal Dutch Shell’s ESG challenges continue unabated. A Dutch court ruled in May that Royal Dutch Shell must cut its CO2 output by 45% by 2030 to align their policies with the Paris Climate Accord. In a statement issued after the verdict, a Shell spokesperson acknowledged that “urgent action is needed on climate change and the company is accelerating efforts to reduce emissions.” If the pressure from the Dutch court system was not enough, an activist shareholder has proposed breaking the company apart to address ESG concerns. On October 27th, Third Point Management announced the following.
“If Shell pursues this type of strategy it would probably lead to an acceleration of carbon dioxide reduction. […] Breaking Shell into two operating units would create a standalone legacy energy business (upstream, refining, and chemicals) that could slow capex beyond what it has already promised, sell assets, and prioritize return of cash to shareholders which can be reallocated into low-carbon areas of the market.”
Shell has already cut spending dramatically over the last decade. After having peaked at $39 bn in 2013, upstream capital spending fell to only $17 bn in 2020 – a drop of nearly 60%. Spending has barely recovered in the three quarters of 2021. A lack of spending has already impacted production. Proforma for the 2016 acquisition of BG Group, Shell’s total production has fallen 13% since capital spending peaked in 2013. These trends are accelerating: Shell’s production over the first nine months of 2021 have fallen 7% compared with the same period last year.
If Royal Dutch Shell’s upstream capital spending remains at today’s depressed levels, we estimate the company will only be able to replace 30% of production with new reserves and that production will fall 40% over the next nine years. If spending is further curtailed (as is being proposed), Shell’s oil and natural gas production would collapse – something that may have already started.”
You can also take a look at 10 Dividend Stocks Billionaire D. E. Shaw is Buying and Top 10 Stock Picks of NewGen Asset Management.
