In today's edition, energy analyst Joel South discusses Murphy Oil's recent decision to spin off its downstream retail segments. The company closed the day up around 8% as the market believes this decision will unlock tremendous value for the company. This decision has been expected after Third Point hedge fund manager Dan Loeb, who's also a 5% owner of Murphy Oil, announced two weeks ago that he believes the company could add 60% more value by divesting its retail segments, as well as some Canadian natural gas and oil sands assets.
By splitting off its downstream operations, Murphy Oil, like a number of integrated oil companies before it, will be able to focus its priorities and efficiently allocate capital in order to maximize shareholder value.
Joel South has no positions in the stocks mentioned above. Taylor Muckerman has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.