Why One Florida Fund Opened a $4 Million Bet on California Resources Despite a 15% Stock Slide
Key Points
Florida-based Kore Advisors initiated a stake in California Resources Corporation during the third quarter, buying up 75,141 shares.
The shares were worth about $4 million at quarter-end.
The new stake represents 4.6% of AUM, which places it outside the fund's top five holdings.
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On November 14, Florida-based Kore Advisors disclosed a new position in California Resources Corporation (NYSE:CRC), acquiring 75,141 shares worth about $4 million during the third quarter, according to a recent SEC filing.
What Happened
Kore Advisors LP established a new stake in California Resources Corporation (NYSE:CRC), according to a Securities and Exchange Commission (SEC) filing dated November 14. The fund acquired 75,141 shares, bringing its holding to about $4 million as of the end of the third quarter. This move brought the fund’s total number of reportable positions to 13.
What Else to Know
This is a new position accounting for 4.6% of the fund's $87.48 million in reportable U.S. equity holdings.
Top holdings after the filing:
- NYSE:UP: $31.29 million (35.8% of AUM)
- NYSE:GEO: $14.78 million (16.9% of AUM)
- NYSE:CRGY: $13.19 million (15.1% of AUM)
- NYSE:WOLF: $9.70 million (11.1% of AUM)
- NYSE:AR: $7.01 million (8.0% of AUM)
As of Wednesday, shares of California Resources Corporation were priced at $44.04, down 14.5% over the past year and significantly underperforming the S&P 500's 15% return in the same period.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $3.51 billion |
| Net income (TTM) | $384.00 million |
| Dividend yield | 3.7% |
| Price (as of Wednesday) | $44.04 |
Company Snapshot
- California Resources Corporation produces and markets crude oil, natural gas, and natural gas liquids; it also generates and sells electricity to utilities and the grid.
- The company operates an integrated model encompassing exploration, production, gathering, processing, and sales, generating revenue primarily from energy commodity sales and power generation.
- It serves marketers, California refineries, utilities, and other purchasers with access to transportation and storage infrastructure.
California Resources Corporation is a leading independent energy company focused on oil and natural gas exploration and production in California. With significant mineral acreage and integrated operations, the company leverages its scale to efficiently serve regional energy demand. Its diversified revenue streams and strategic market positioning provide resilience and competitive advantage in the California energy sector.
Foolish Take
California Resources is coming off a volatile year for energy equities, yet its underlying cash engine has quietly strengthened in ways long-term investors care about. In the third quarter, the company generated $279 million in operating cash flow and $188 million in free cash flow, enough to support both balance sheet repair and shareholder returns. Management raised the quarterly dividend by 5% to $0.405 per share and redeemed all remaining 2026 senior notes, extending maturities and reducing near-term risk.
Production held steady at 137 thousand barrels of oil equivalent per day, with oil making up roughly 78% of volumes, while adjusted EBITDAX reached $338 million for the quarter. Liquidity remains ample at more than $1.1 billion when combining cash and borrowing capacity. That profile stands out in a portfolio otherwise dominated by higher-beta, more cyclical names, suggesting this stake plays a stabilizing role rather than a speculative one.
For long-term investors, the takeaway is discipline. California Resources is prioritizing free cash flow, dividends, and debt reduction over aggressive growth. In a sector prone to boom-and-bust cycles, that restraint can be just as valuable as chasing the next rally.
Glossary
Reportable assets under management (AUM): The total value of investments a fund must disclose in regulatory filings.
Position: The amount of a particular security or investment held by an investor or fund.
Stake: The ownership interest or share held in a company by an investor or fund.
Initiated: The act of opening or starting a new investment position in a security.
Filing: An official document submitted to regulators, often detailing investment holdings or transactions.
Integrated model: A business structure where a company controls multiple stages of its supply chain or operations.
Mineral acreage: Land area over which a company holds rights to explore for and produce minerals, such as oil or gas.
Gathering: The process of collecting oil or gas from production sites for processing or transport.
Processing: The treatment of raw oil or gas to remove impurities and prepare it for sale or use.
Dividend yield: A financial ratio showing how much a company pays in dividends relative to its share price.
Resilience: The ability of a company to withstand market or industry downturns and maintain operations.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends Wolfspeed. The Motley Fool has a disclosure policy.
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