Here's Why SCCM Value Equity Fund Sold Sempra (SRE) in Q3

Cullen Capital Management, LLC, operating under the name Schafer Cullen Capital Management, Inc. (SCCM), has released its “SCCM Value Equity Strategy” third-quarter investor letter. A copy of the letter can be downloaded here. The US equity market continued the rally in the third quarter, with the S&P 500 returning 8.1% and the Russell 1000 Value surging 5.3%. The value equity strategy returned 6.9% (gross of fees) and 6.8% (net of fees) in the quarter, while the Russell 1000 Value and S&P 500 returned 5.3% and 8.1%, respectively, during the same period. The strategy returned 13.0% (gross), YTD, compared to the Russell 1000 Value’s +11.7% return and the S&P 500’s +14.8% return. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, SCCM Value Equity Strategy highlighted stocks such as Sempra (NYSE:SRE). Sempra (NYSE:SRE) is an energy infrastructure company. The one-month return of Sempra (NYSE:SRE) was -0.86%, and its shares lost 3.88% of their value over the last 52 weeks. On November 19, 2025, Sempra (NYSE:SRE) stock closed at $91.02 per share, with a market capitalization of $59.407 billion.

SCCM Value Equity Strategy stated the following regarding Sempra (NYSE:SRE) in its third quarter 2025 investor letter:

"Sempra (NYSE:SRE) was sold from the strategy during the quarter. Sempra is an electric and gas utility company with businesses in California and Texas. The company has benefitted from load growth in Texas, driven by the AI data center buildout and by a growing population in the state. However, the company’s California utility received a negative rate case decision, with both the electric and gas utilities in South California receiving lower rates than they had requested. The challenges in the California utility market outweigh the positives of the Texas utility market. Sempra’s 20x P/E multiple provides a less compelling valuation than the 16x P/E multiple it had when the stock was purchased in 2024."

Sempra (NYSE:SRE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 47 hedge fund portfolios held Sempra (NYSE:SRE) at the end of the second quarter, compared to 48 in the previous quarter.  While we acknowledge the potential of Sempra (NYSE:SRE) 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 covered Sempra (NYSE:SRE) and shared the list of stocks Jim Cramer discussed recently. In addition, please check out our hedge fund investor letters Q3 2025 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.