Oil Price Softness and CEO Transition Weigh on Occidental Petroleum’s (OXY) Quarterly Results

Cooke & Bieler, an investment management firm, released its second-quarter investor letter for "Mid Cap Value Equity Strategy." The letter can be downloaded here. U.S. equities rallied significantly in Q2, driven by shifting geopolitical risks and strong investor appetite for high-beta stocks, particularly in the tech sector, contributing to the S&P 500® and Nasdaq's best quarterly returns in six years. Although growth outperformed value and small-cap stocks surged, the energy sector declined due to falling oil prices and developments in Iran. The Cooke & Bieler Mid Cap Value Strategy returned 8.05% in the quarter, lagging behind the Russell Midcap® Value Index's 13.4%. An underweight in Information Technology drove nearly all of the portfolio's Q2 performance shortfall as the sector surged 60% on AI capex. Despite gains in many sectors, the market's momentum is concentrated on AI-related stocks, presenting a speculative environment influenced by passive investment flows. While AI interest remains strong, the pressure for tangible financial results raises concerns about sustainability. The firm emphasizes adherence to investment principles while identifying opportunities in businesses less vulnerable to AI disruption, potentially leading to better long-term performance. You can also review the fund's top 5 holdings to see its best picks for 2026.

In its second-quarter 2026 investor letter, Cooke & Bieler Mid Cap Value Equity Strategy highlighted Occidental Petroleum Corporation (NYSE:OXY). During the quarter, Occidental Petroleum Corporation (NYSE:OXY), an American oil and gas company, detracted from performance. On September 29, 2026, Occidental Petroleum Corporation (NYSE:OXY) closed at $54.94, with a $54.92 billion market capitalization. The stock posted a ~33.61% YTD gain, trading within a 52-week range of $38.80 to $67.45. Occidental Petroleum Corporation (NYSE:OXY) reported $23.93 billion in trailing twelve-month (TTM) revenue.

Cooke & Bieler Mid Cap Value Equity Strategy stated the following regarding Occidental Petroleum Corporation (NYSE:OXY) in its Q2 2026 investor letter

"Occidental Petroleum Corporation (NYSE:OXY), a diversified E&P company with strong shale and conventional assets, was the largest detractor. Easing geopolitical tension in June pushed oil prices lower, weighing on E&P stocks broadly. Given that 51% of OXY's production is crude oil, the stock came under additional pressure amid easing supply disruption fears. Around the same time, the company completed a CEO transition, posing a further headwind. Still, the company's U.S. positioning made them less vulnerable to the Strait of Hormuz disruptions that affected competitors, and they put up better than expected first quarter production while guiding to stable volumes for the rest of the year."

Occidental Petroleum Corporation (NYSE:OXY) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 74 hedge fund portfolios held Occidental Petroleum Corporation (NYSE:OXY) at the end of the second quarter, which was 78 in the previous quarter. While we acknowledge the potential of Occidental Petroleum Corporation (NYSE:OXY) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we discussed Occidental Petroleum Corporation (NYSE:OXY) and examined why analysts are bullish on the stock. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

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This article is originally published at Insider Monkey.