HF Sinclair (DINO) Strengthens from Its Refining Segment Despite Sector Weakness

The Cambiar SMID Fund, managed by Cambiar Investors, reported a 14.39% return in its Q2 2026 investor letter, marking its best performance since Q4 2022. Despite the fund's overall underperformance compared to the S&P 500's 15.2% and Russell 2000's 21.5% gains, HF Sinclair Corporation (NYSE:DINO) stood out as a bright spot within the Energy sector.

HF Sinclair Corporation, an independent energy company, operates through Refining, Renewables, Marketing, Lubricants & Specialties, and Midstream segments. In September 2026, the company's stock closed at $113.97 per share, up 22.92% over the past month and 114.59% over the past year. The company's market capitalization is $20.26 billion, with its stock trading within a 52-week range of $45.71 to $114.79.

In the Q2 2026 investor letter, Cambiar SMID Fund acknowledged that the Energy sector declined in the second quarter due to settlement talks with Iran, leading to a drop in oil prices. However, HF Sinclair Corporation's refining segment contributed significantly to the company's positive performance, as supply disruptions resulted in a significant increase in crack spreads, or the profits earned by refiners from converting crude oil into gasoline and diesel products.

While this boost in margins may normalize as supply returns to normal, it could take several more quarters to achieve this equilibrium. HF Sinclair Corporation is not among the top 40 most popular stocks among hedge funds, with only 44 hedge fund portfolios holding the company at the end of the second quarter, compared to 43 in the previous quarter.

Although the fund recognizes HF Sinclair Corporation's potential as an investment, they believe there are AI stocks with greater upside potential and less downside risk.