Should I Buy Occidental Petroleum Corporation (OXY)?

In this article we will analyze whether Occidental Petroleum Corporation (NYSE:OXY) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.

Is Occidental Petroleum Corporation (NYSE:OXY) a bargain? The best stock pickers were getting more optimistic. The number of long hedge fund positions rose by 3 recently. Occidental Petroleum Corporation (NYSE:OXY) was in 60 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 62. Our calculations also showed that OXY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a glance at the recent hedge fund action encompassing Occidental Petroleum Corporation (NYSE:OXY).

Carl Icahn of Icahn Capital

Do Hedge Funds Think OXY Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 60 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards OXY over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Icahn Capital LP, managed by Carl Icahn, holds the biggest position in Occidental Petroleum Corporation (NYSE:OXY). Icahn Capital LP has a $1.3311 billion position in the stock, comprising 5.9% of its 13F portfolio. Coming in second is GQG Partners, managed by Rajiv Jain, which holds a $587.2 million position; 1.6% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish consist of David Tepper’s Appaloosa Management LP, Carl Icahn’s Icahn Capital LP and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Key Square Capital Management allocated the biggest weight to Occidental Petroleum Corporation (NYSE:OXY), around 10.67% of its 13F portfolio. Icahn Capital LP is also relatively very bullish on the stock, dishing out 5.91 percent of its 13F equity portfolio to OXY.

Consequently, specific money managers have jumped into Occidental Petroleum Corporation (NYSE:OXY) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the biggest position in Occidental Petroleum Corporation (NYSE:OXY). Balyasny Asset Management had $34.6 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $14.8 million position during the quarter. The following funds were also among the new OXY investors: Israel Englander’s Millennium Management, Frank Fu’s CaaS Capital, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Occidental Petroleum Corporation (NYSE:OXY) but similarly valued. We will take a look at Zebra Technologies Corporation (NASDAQ:ZBRA), PACCAR Inc (NASDAQ:PCAR), Delta Air Lines, Inc. (NYSE:DAL), Skyworks Solutions Inc (NASDAQ:SWKS), Bill.com Holdings, Inc. (NYSE:BILL), Li Auto Inc. (NASDAQ:LI), and Laboratory Corp. of America Holdings (NYSE:LH). This group of stocks’ market valuations are similar to OXY’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 42 hedge funds with bullish positions and the average amount invested in these stocks was $1609 million. That figure was $3190 million in OXY’s case. Bill.com Holdings, Inc. (NYSE:BILL) is the most popular stock in this table. On the other hand Li Auto Inc. (NASDAQ:LI) is the least popular one with only 20 bullish hedge fund positions. Occidental Petroleum Corporation (NYSE:OXY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OXY is 81.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately OXY wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on OXY were disappointed as the stock returned 0.2% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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