Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Murphy Oil (NYSE: MUR ) climbed as much as 10% after the company announced it would spin off its refining and distribution segment and focus on core functions of exploring and producing oil and gas.
So what: The board also said it would pay out a $500 million one-time dividend of $2.50 per share, and would begin a $1 billion share buyback program. Spinning off the lower-margin downstream should help Murphy unlock greater value, and echoes a similar strategy employed by oil majors like Conoco Phillips (NYSE: COP ) , which recently separated itself from Phillips 66 (NYSE: PSX ) , its former refining division.
Now what: Considering all the moves, shareholders might question why the stock didn't jump even higher. At a market cap near $12 billion, the buybacks alone should boost the share price by about 8%, and the dividend windfall adds another $2.50, yet shares were only up about $5 near the closing bell. Investors may want to jump on board before Nov. 16, the dividend date of record, to take advantage of the special offer.
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