Here’s What Led to Murphy USA’s (MUSA) Outperformance in Q2

The London Company, an investment management company, released “The London Company Small Cap Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the quarter, the fund fell 5.8% (5.9%, net) compared to a 3.3% decrease in the Russell 2000 Index. The positive impact of sector allocation was mitigated by stock selection in the second quarter. For more information on the fund’s top picks in 2024, please check its top five holdings.

The London Company Small Cap Strategy highlighted stocks like Murphy USA Inc. (NYSE:MUSA), in the second quarter 2024 investor letter. Murphy USA Inc. (NYSE:MUSA) markets retail motor fuel products and convenience merchandise. The one-month return of Murphy USA Inc. (NYSE:MUSA) was 5.65%, and its shares gained 60.99% of their value over the last 52 weeks. On August 9, 2024, Murphy USA Inc. (NYSE:MUSA) stock closed at $510.90 per share with a market capitalization of $10.469 billion.

The London Company Small Cap Strategy stated the following regarding Murphy USA Inc. (NYSE:MUSA) in its Q2 2024 investor letter:

“Murphy USA Inc. (NYSE:MUSA) – Investors were cautious about the fuel market environment after MUSA’s 1Q report showed margin pressure in the face of steep fuel price increases. That trend reversed in 2Q with fuel prices falling -15% peak to trough, leading to MUSA’s outperformance. While there is a level of short-term volatility in MUSA’s results due to fuel price fluctuations, we prefer to assess the business with a view to the long term. We continue to believe that the business is structurally improving and management’s favorable capital allocation policies should yield attractive shareholder returns.”

An exterior view of an illuminated gas station at night, surrounded by cars.

Murphy USA Inc. (NYSE:MUSA) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Murphy USA Inc. (NYSE:MUSA) at the end of the first quarter which was 30 in the previous quarter. While we acknowledge the potential of Murphy USA Inc. (NYSE:MUSA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In addition, please check out our hedge fund investor letters Q2 2024 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.