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.
The downstream retail segment has turned in a solid performance over the past quarter and the opportunities still remain bountiful. One downstream company with enormous potential in this field is Clean Energy Fuels, which focuses its natural gas efforts primarily on trucking and fleets. It is poised to make a big impact in this essential industry, but to see if this company is a buy, click here to get started on a brand new premium report.