5 Energy Stocks Lucas Capital Likes for Q2

#3 Western Gas Equity Partners LP (NYSE:WGP)

 – Shares Owned by Lucas Capital (as of March 31): 82,400

 – Value of Holding (as of March 31): $2.94 Million

Lucas Capital cut its stake in the high-yield MLP by 9% during the March quarter. Western Gas Equity Partners LP (NYSE:WGP) closed its $750 million acquisition of Springfield Pipeline LLC from Anadarko Petroleum Corporation (NYSE:APC) in mid-March. Western Gas Equity Partners’ stock has rallied by a little over 10% so far this year. Stuart J. Zimmer‘s Zimmer Partners was bullish on Western Gas Equity Partners LP (NYSE:WGP) in the fourth trimester as it raised its stake by 61% to about 420,500 shares.

#2 EOG Resources Inc (NYSE:EOG)

 – Shares Owned by Lucas Capital (as of March 31): 42,400

 – Value of Holding (as of March 31): $3.07 Million

The $46 billion oil & gas exploration and production company has seen its stock rise by almost 17% on a year-to-date basis. Lucas Capital appears to have taken some money off the table in this case as well, slashing its holding by 27% during the March quarter. Nonetheless, the holding is still the fund’s second-largest among energy stocks and it has held a stake in EOG Resources Inc (NYSE:EOG) since the first quarter of 2012. Shares are up by about 48% since then. Deutsche Bank recently downgraded the company to ‘Hold’ from ‘Buy’ and revised its price target to $83 from $85 on valuation concerns. EOG’s significant outperformance in the sector accompanied by aggressive multiple expansion (6.2x premium on 2016 EV/DACF) as compared to its peers limits the upside potential of the stock going forward. Selz Capital, which is led by Bernard Selz, held 40,000 shares of EOG Resources Inc (NYSE:EOG) valued at $2.9 million at the end of March.

#1 Magellan Midstream Partners, L.P. (NYSE:MMP)

 – Shares Owned by Lucas Capital (as of March 31): 45,391

 – Value of Holding (as of March 31): $3.12 Million

Lucas Capital’s largest equity investment in the energy sector represented 2.28% of its portfolio at the end of the first trimester, after the fund trimmed its holding by 3% during the quarter. Magellan Midstream Partners, L.P. (NYSE:MMP) recently increased its dividend by 12% to lift its yield to 4.47%. Along with TransMontaigne Partners L.P. (NYSE:TLP), the energy pipeline and storage company has been assessing the development of a new refined products pipeline in South Texas, which could have an approximate length of 150 miles with a 16-inch diameter. Osterweis Capital Management, which is led by John Osterweis, was the largest stockholder of Magellan Midstream Partners, L.P. (NYSE:MMP) among the funds that we track as of December 31, holding more than 571,400 shares.

Disclosure: None