Cullen Sells 1.4 Million Dow Shares Worth $39.7 Million Amid Steep Stock Decline

Key Points

• Cullen Capital Management sold 1,360,725 shares of chemicals giant Dow during the second quarter, a transaction valued at an estimated $39.71 million based on average pricing in the quarter.

• The transaction represented about 0.45% of the firm's reportable assets under management.

• After the transaction, Cullen still holds about 3.2 million shares valued at $84.31 million as of June 30.

• This reduces the DOW stake to 0.96% of AUM, placing it outside the fund’s top five holdings.

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Cullen Capital Management, LLC disclosed a significant sale of Dow(NYSE:DOW) on Friday, reducing its position by nearly 1.4 million shares in a transaction worth an estimated $39.71 million based on average prices for the quarter.

What happened

New York-based Cullen Capital Management, LLC disclosed in a Tuesday filing with the Securities and Exchange Commission that its position in chemicals giant Dow decreased by nearly 1.4 million shares between March 31 and June 30. The estimated trade size was valued at $39.7 million based on the average price over the quarter. The fund’s remaining stake stands at nearly 3.2 million shares, valued at $84.3 million as of June 30.

What else to know

This was a sell transaction, reducing the firm's DOW holdings to 0.96% of reportable assets.

Top holdings after the filing:

• JPM: $303.6 million (3.5% of AUM)
• CSCO: $280 million (3.2% of AUM)
• BAC: $260.6 million (3.0% of AUM)
• NVS: $253.7 million (2.9% of AUM)
• DUK: $241.9 million (2.8% of AUM)

As of Monday, Dow shares were priced at $22.89, down 58.1% over the year, and vastly underperforming the S&P 500's nearly 16% gain over the same period.

Company overview

Company snapshot

Dow is a leading global materials science company with a diversified product portfolio and significant scale, amassing $41.82 billion in annual revenue for the 12 months ended June 30. The company leverages its expertise in chemistry and engineering to deliver innovative solutions for a broad range of end markets. The firm generates revenue by manufacturing and distributing specialty chemicals and materials through three main segments: Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure, and Performance Materials & Coatings. It also serves a global customer base across sectors such as packaging, construction, automotive, consumer goods, and industrial manufacturing.

Foolish take

Cullen’s sale comes at a tough time for Dow, which has struggled under weaker demand and pricing pressure across its chemicals and plastics businesses, which have been further exacerbated by high costs, particularly in feedstock.

The stock has shed more than half its value in just 12 months, and institutional selling underscores how cyclical and volatile this business can be. That said, Dow remains a global leader with broad reach across packaging, infrastructure, and mobility. At today’s levels, its dividend yield looks enticing, though the payout will be closely tied to future earnings strength. For investors, the decision boils down to risk tolerance: Dow could offer a rebound opportunity if the economy stabilizes, but near-term headwinds may keep the stock under pressure.

Glossary

13F reportable assets: Assets that institutional investment managers must disclose quarterly to the Securities and Exchange Commission (SEC), showing their equity holdings.

Assets under management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.

Dividend yield: Annual dividends paid by a company divided by its share price, expressed as a percentage.

Stake: The ownership interest or share held in a company by an investor or institution.

Top holdings: The largest investments in a fund’s portfolio, typically ranked by market value.

Sell transaction: The act of disposing of or reducing a position in a security or asset.

Materials science: The study and application of materials’ properties to develop new products or improve existing ones.

Segments: Distinct business divisions within a company, often reported separately in financial statements.

Performance Materials & Coatings: A business segment focused on advanced materials and specialty coatings for various industries.

Industrial Intermediates & Infrastructure: A segment producing chemicals and materials used in manufacturing and construction.

Packaging & Specialty Plastics: A segment producing plastics and materials for packaging and specialty applications.

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. JPMorgan Chase is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Motley Fool Markets Team is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. The Motley Fool takes ultimate responsibility for the content of these articles. Motley Fool Markets Team cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends Cisco Systems and JPMorgan Chase. The Motley Fool recommends Duke Energy. The Motley Fool has a disclosure policy.