Meridian Contrarian Fund Cuts California Resources Corp. (CRC) in Anticipation of Downturn

Meridian Contrarian Fund Cuts California Resources Corp. (CRC) in Anticipation of Downturn

Fri, September 4, 2026 at 5:50 PM GMT+3 3 min read

• ^GSPC -0.46%
• CRC +0.39%

Meridian Funds, managed by ArrowMark Partners, released its second-quarter 2026 investor letter for "Meridian Contrarian Fund". The letter can be downloaded here. U.S. equity markets experienced a strong recovery in Q2 2026, driven by improved sentiment following de-escalation of geopolitical tensions and retreating energy prices. S&P 500 companies reported first-quarter profit growth above expectations, bolstering investor confidence. Significant gains in semiconductor and memory chip stocks were fueled by an accelerated AI investment cycle. The Russell 2500 Index saw a 20.26% return, notably propelled by the Information Technology sector, which accounted for nearly 50% of the index's gains. The Meridian Contrarian Fund returned 17.75%, underperforming both the Russell 2500 Index and the Russell 2500 Value Index. Looking ahead, the investment strategy remains focused on finding value in overlooked companies. Also, check the fund's top five holdings to see its best picks in 2026.

In its second-quarter 2026 investor letter, Meridian Contrarian Fund highlighted California Resources Corporation (NYSE:CRC). California Resources Corporation (NYSE:CRC) is a US-based independent energy and carbon management company. On September 03, 2026, California Resources Corporation (NYSE:CRC) closed at $53.72 per share, reflecting a market capitalization of $4.77 billion. California Resources Corporation (NYSE:CRC) posted a one-month return of -4.76%, while its shares gained 8.66% over the past 52 weeks.

Meridian Contrarian Fund stated the following regarding California Resources Corporation (NYSE:CRC) in its Q2 2026 investor letter:

"California Resources Corporation (NYSE:CRC) is an oil and gas producer in the state of California with a growing carbon management business harvesting CO2 from industrial locations and storing in spent oil caverns. We initially invested in California Resources shortly after an emergence from bankruptcy as the company's varied assets – oil and gas production, ocean front land south of Los Angeles, and carbon management – were misunderstood and growth drivers for the company. The stock underperformed in the quarter as optimism of a resolution in the Middle East is possible and oil supply partially resumed through the Strait of Hormuz. We reduced our position in anticipation of this decline and still remain holders focused on the opportunities for value creation beyond oil production in CRC."

California Resources Corporation (NYSE:CRC) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. According to our database, 37 hedge fund portfolios held California Resources Corporation (NYSE:CRC) at the end of the second quarter, compared to 40 in the previous quarter. While we acknowledge the potential of California Resources Corporation (NYSE:CRC) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we discussed California Resources Corporation (NYSE:CRC) and shared a list of undervalued stocks to buy according to the Wall Street. California Resources Corporation (NYSE:CRC) outperformed in Q1 2026, as it showcased its carbon neutral energy, land, and water for AI data centers in California, while expanding oil production. In addition, please check out our hedge fund investor letters Q2 2026 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.