TCW Funds, an investment management company, released its “TCW Relative Value Large Cap Fund” Q3 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, U.S. and European indices reached all-time highs, fueled by optimism surrounding central bank easing, decreasing inflation, rising hopes for a soft landing, and stimulus measures in China. In the third quarter, all sectors of the Russell 1000 Value posted gains, except for energy. The portfolio’s top ten average-weighted names returned 12.9%, on average, better than the portfolio and benchmark index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
TCW Relative Value Large Cap Fund highlighted stocks like Chevron Corporation (NYSE:CVX) in the third quarter 2024 investor letter. Chevron Corporation (NYSE:CVX) engages in integrated energy and chemicals operations that operates through Upstream and Downstream segments. The one-month return of Chevron Corporation (NYSE:CVX) was -5.88%, and its shares lost 1.10% of their value over the last 52 weeks. On January 3, 2025, Chevron Corporation (NYSE:CVX) stock closed at $147.85 per share with a market capitalization of $263.605 billion.
TCW Relative Value Large Cap Fund stated the following regarding Chevron Corporation (NYSE:CVX) in its Q3 2024 investor letter:
“Chevron Corporation (NYSE:CVX), headquartered in San Ramon, CA, is an integrated energy company. At elimination, the stock had a $273 billion market capitalization and met all five valuation factors, including a robust 4.4% dividend yield. Chevron’s planned acquisition of Hess† would yield a strong restructuring catalyst through elimination of duplicate corporate costs and a new markets catalyst through Hess’ 30% interest in the Stabroek oilfield off Guyana; these blocks have a very low cost of supply and decades of reserves that would support strong free cash flow. While Chevron recently received Hart[1]Scott-Rodino (HSR) clearance to acquire the company, the closure timing has extended from Q4 2024 to possibly to Q2 2025 as Chevron is engaged in arbitration with peers ExxonMobil (XOM; 2.47%**) and Chinese state-owned CNOON over rights of first refusal (ROFR) for Hess’ interest in Stabroek. As Chevron’s expected arbitration resolution timeline has slipped, we believe that ExxonMobil and CNOOC’s ROFR case may have more merit than expected, thus putting the entire Hess acquisition at risk. Given an increasingly reasonable outcome that Chevron might abandon the Hess acquisition altogether, we eliminated the position in the stock.”
A tanker truck making its way through a refinery facility. .
Chevron Corporation (NYSE:CVX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 63 hedge fund portfolios held Chevron Corporation (NYSE:CVX) at the end of the third quarter which was 64 in the previous quarter. Chevron Corporation (NYSE:CVX) generated earnings of $4.5 billion in the third-quarter or $2.48 per share. While we acknowledge the potential of Chevron Corporation (NYSE:CVX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Chevron Corporation (NYSE:CVX) and shared the list of undervalued dividend aristocrats to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.