This Fund Trimmed Murphy USA (MUSA) Amid Fuel Margin Strengths

This Fund Trimmed Murphy USA (MUSA) Amid Fuel Margin Strengths

Tue, September 22, 2026 at 5:28 PM GMT+3 2 min read

The London Company, an investment management company, released its second-quarter 2026 investor letter for its "Small Cap Strategy." U.S. equities rebounded in the quarter, driven by AI infrastructure spending and positive earnings. The letter can be downloaded here. Despite this optimism, rate outlook uncertainty persisted. Technology, previously weak, surged to lead the market, especially in semiconductors, while energy declined as oil prices fell. Small caps outperformed large caps, with momentum and volatility factors leading, although quality and yield were headwinds for portfolios. The London Company Small Cap portfolio increased 12.9% during the quarter, underperforming the Russell 2000 Index's 21.5% gain, primarily due to stock selection issues. The firm remains confident in the durable, high-quality businesses for attractive long-term compounding. Please review the Fund's top five holdings to learn more about its key selections for 2026.

In its second-quarter 2026 investor letter, London Company Small Cap Strategy highlighted Murphy USA Inc. (NYSE:MUSA). Murphy USA Inc. (NYSE:MUSA) engages in marketing of retail motor fuel products and convenience merchandise. On September 21, 2026, Murphy USA Inc. (NYSE:MUSA) closed at $508.98 per share. Over the past month, Murphy USA Inc. (NYSE:MUSA) declined 6.49%, but its shares are up 29.72% over the past year. Murphy USA Inc. (NYSE:MUSA) has a market capitalization of $9.35 billion, and its stock has traded within a 52-week range of $349.83 to $636.05.

London Company Small Cap Strategy stated the following regarding Murphy USA Inc. (NYSE:MUSA) in its Q2 2026 investor letter:

"Reduced: Murphy USA Inc. (NYSE:MUSA) - We trimmed MUSA after the stock rallied on fuel margin strength, which is inherently cyclical and difficult to sustain at current levels. The core thesis and our long-term conviction remain intact, and we redeployed proceeds into additional opportunities within the portfolio."

Murphy USA Inc. (NYSE:MUSA) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. According to our database, 40 hedge fund portfolios held Murphy USA Inc. (NYSE:MUSA) at the end of the second quarter, down from 41 in the previous quarter. While we acknowledge the potential of Murphy USA Inc. (NYSE:MUSA) 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 Murphy USA Inc. (NYSE:MUSA) and noted that it delivered robust second-quarter earnings on surging fuel margins. 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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This article is originally published at Insider Monkey.