Eric Mandelblatt’s Soroban Capital Partners Discloses 10% Activist Position

Despite the price, some analysts still aren’t sold on California Resources Corp (NYSE:CRC), at least short-term. In a report by Morgan Stanley at the end of January, they gave the stock a rating of ‘Underweight’ and a price target of just $3, citing extreme leverage in 2015, while estimating capital expenditures will fall by 50%. Citigroup analyst Tim Evans likewise told the Wall Street Journal that he sees near-term downside risks in the stock, and that oil prices will continue to face headwinds. California Resources Corp (NYSE:CRC) will announce its 2014 fourth quarter and full-year results on February 19.

Despite that, we feel Soroban’s deep knowledge of both the sector and the company, as well as their potential future involvement in it as activist investors, is a very strong and encouraging signal. Tracking and imitating the moves of such activist positions is a strategy that has proven to be successful in recently years, which is why we follow and report on such moves.

There are no other known funds with investments in California Resources Corp (NYSE:CRC) at this time, though it’s possible that like Soroban, other investors in Occidental Petroleum Corporation (NYSE:OXY) will also make the move over to California Resources. Occidentals top shareholders as of Septmeber 30 among funds we track included Robert Rodriguez and Steven Romick’s First Pacific Advisors with 4.23 million shares, John A. Levin’s Levin Capital Strategies with 2.38 million shares, and First Eagle Investment Management with 2.24 million shares.

Disclosure: None