Is Murphy USA (MUSA) A Smart Long-Term Buy?

ClearBridge Investments, an investment management firm, published its “Small Cap Value Strategy” third quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Small Cap Value Strategy outperformed the Russell 2000 Value Index, the Strategy’s benchmark, during the third quarter of 2021. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

ClearBridge Investments Small Cap Value Strategy, in its Q3 2021 investor letter, mentioned Murphy USA Inc. (NYSE: MUSA) and discussed its stance on the firm. Murphy USA Inc. is an El Dorado, Arkansas-based retail company with a $4.9 billion market capitalization. MUSA delivered a 46.43% return since the beginning of the year, while its 12-month returns are up by 47.23%. The stock closed at $191.63 per share on December 24, 2021.

Here is what ClearBridge Investments Small Cap Value Strategy has to say about Murphy USA Inc.  in its Q3 2021 investor letter:

“Murphy USA, which operates a chain of retail gas stations, was up +25.6% and was our top contributor. Murphy USA continued to produce excellent financial results despite pressure on fuel volumes. The company’s exceptionally low fuel breakeven points relative to peers has allowed it to earn much better margins on fuel than it can when gas is in high demand, because competitors need to raise prices more to remain profitable when volumes fall. In addition, strong uptake in its customer loyalty program is driving merchandise purchases even as fuel volumes remain low, and cost discipline is keeping operating costs low. We continue to believe Murphy is one of the best-run companies in the U.S. and that it remains attractively valued.”

Photo by Juan Fernandez on Unsplash

Based on our calculations, Murphy USA Inc. (NYSE: MUSA) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. MUSA was in 17 hedge fund portfolios at the end of the third quarter of 2021, compared to 26 funds in the previous quarter. Murphy USA Inc. (NYSE: MUSA) delivered a 17.49% return in the past 3 months.

You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.

Disclosure: None. This article is originally published at Insider Monkey.