This fund has been selling down its Woodside shares. Should you?

Woodside shares are up by more than 70% in 2022.

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Key points

  • The Woodside share price is up almost 2%% to $38.71 today, and up by more than 70% in 2022 alone
  • One fund manager says it's time to sell, with his fund taking profits on various ASX energy stocks in recent times 
  • Another fundie says he likes Woodside for dividend income, with the company currently offering a fully franked trailing dividend yield of 11.3% 

The Woodside Energy Group Ltd (ASX: WDS) share price is up 1.91% to $38.71, as the broader market enjoys a strong run following softer monthly inflation data from the United States.

Woodside has had an absolutely cracking year in 2022. The Woodside share price is currently up 71% in the year to date. This is largely due to energy supply constraints brought about by Russia's invasion of Ukraine.

Just two years ago, Woodside shares were in a hole.

COVID-19 lockdowns meant global industrial activity and the use of vehicles declined significantly, reducing the need for fuel.

Woodside was a COVID-19 loser for sure. The Woodside share price dropped to about $16 in the market crash in March 2020. It then spent much of the following two years below $25 per share.

So, for those Woodside investors sitting on very healthy capital gains right now, is it time to sell?

Fundie says Woodside share price is a sell

Benjamin Goodwin of Merlon Capital thinks it's time to cash in on the Woodside share price today.

Goodwin writes on Livewire that his fund has taken profits on a number of ASX energy stocks. These include Woodside, Ampol Ltd (ASX: ALD), Viva Energy Group Ltd (ASX: VEA), and Santos Ltd (ASX: STO).

The fund has also sold down the ASX coal shares of New Hope Corporation Limited (ASX: NHC) and Whitehaven Coal Ltd (ASX: WHC).

Goodwin said:

Having previously identified and invested in the opportunities made available through prolonged underinvestment in traditional energy fuels and invested on the basis of the estimated risk/return trade-offs, we have been steadily reducing exposures as companies in this space have outperformed.

The case to hold… or even buy?

Romano Sala Tenna, co-founder of Katana Asset Management, told my Fool colleague Bernd in a recent interview that he's bullish on Woodside for dividend income purposes.

Right now, based on today's Woodside share price, the oil and gas giant is offering a fully franked trailing dividend yield of 11.3%.

Back in September, Woodside declared its highest interim dividend since 2014 at 109 US cents per share.

This was due to a 400% profit surge, in part due to the merger with the petroleum business of BHP Group Ltd (ASX: BHP).

My colleague, Bruce Jackson, points out that Woodside is trading on trailing single-digit multiples.

For the record, the ASX website has Woodside sitting on a price-to-earnings (P/E) ratio of 8.1.

Bruce reckons Woodside has significant future falls in the oil price already reflected in its share price.  

Motley Fool contributor Bronwyn Allen has positions in BHP Billiton Limited and Woodside Petroleum Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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