First Eagle Global Real Assets Fund on Shell plc
Thesis
Shell's shares declined with oil prices despite the company reporting better-than-expected earnings. One of its production facilities in Qatar was damaged by missile strikes, but the fund believes Shell's geographically diversified LNG portfolio gives it flexibility to reroute cargoes from other regions. This diversification provides resilience when individual production or shipping routes are disrupted. The fund also continues to favor management's commitment to distributing cash through dividends and share repurchases.
“We continue to like management’s commitment to returning cash to shareholders through dividends and buybacks.”
Key risks
- Lower oil prices can pressure earnings and the share price.
- Geopolitical conflict can damage production facilities and disrupt LNG operations.