This move undercuts investor gains

Article Excerpt

OCCIDENTAL PETROLEUM CORP., $38.48, is okay for aggressive investors to hold. The company (New York symbol OXY; Resources sector; Shares o/s: 893.3 million; Market cap: $34.4 billion; Divd. yield: 8.3%; Takeover Target Rating: Medium; www.oxy.com) paid $35.7 billion (81% cash, 19% stock) for oil producer Anadarko in August 2019. Billionaire investor Carl Icahn opposed the merger. In response, he cut his stake in Occidental by about 30%. He now controls about 3% of the outstanding shares. Icahn plans to launch a proxy war to replace Occidental’s board of directors in 2020. That’s mainly because he fears the company will rush to sell assets in an effort to cut its $47.6 billion in long-term debt—a very high 1.4 times its market cap. Icahn is concerned those sales would unnecessarily hurt investor value. He also notes that while oil has dropped only 12% since last April, Occidental’s shares are down 42%. Due to that drop, the stock is now yielding a very high 8.3%, which seems unsustainable in…