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Billionaire Andrew Hall’s Top Stock Picks

Astenbeck Capital Management, managed and 80% owned by Andrew Hall, is a hedge fund with a focus on energy and basic materials. The other 20% of the fund is owned by Occidental Petroleum Corporation (NYSE:OXY). Recently, the fund filed its 13F for the second quarter of 2012, allowing us to see some of the fund’s long positions. Astenbeck Capital Management doesn’t recommend or endorse any of the stocks or analysis in this article, and we have no relationship with the fund, but based on SEC filings these are our opinions of what they are thinking. Read on to see the fund’s largest reported positions or compare them to earlier filings.

Statoil ASA (ADR) (NYSE:STO)

The fund’s top position was Norway-based oil giant Statoil ASA (NYSE:STO). Best known for its offshore operations in the North Sea, Statoil ASA (NYSE:STO) has also begun investing in U.S. shale oil recently through its purchase of Bakken-focused Brigham Exploration and Production. Astenbeck owned 2.4 million shares as of the end of June, unchanged from the end of March. Statoil ASA (NYSE:STO) looks like a reasonable value investment, trading at 9 times forward earnings estimates and paying a dividend yield of 3.7% (though the dividend paid, like the company’s stock price, tends to fluctuate with oil prices).

Total S.A. (NYSE:TOT) joined Statoil as a dividend-paying, non-U.S. based (French in this case), value-priced (forward P/E of 7) oil company at the top of Astenbeck’s portfolio. Again, in this case, the fund’s position was left unchanged from the previous quarter at 1.1 million shares. Total S.A. (NYSE:TOT) has underperformed the market recently after missing earnings expectations for the last three quarters. International Value Advisers reported a position of 5.8 million shares of the stock at the end of March.

Royal Dutch Shell Plc (NYSE:RDS.A) was the third oil and gas exploration and production company on Astenbeck’s top stock picks. It has also underperformed the market as in its most recent quarter its earnings fell by over half compared to the same period in the previous year, and its trailing P/E multiple comes in just above 8. Astenbeck also kept his position in Royal Dutch Shell Plc (NYSE:RDS.A) constant, at about 460,000 shares.

The fund did increase its stake in Freeport-McMoRan Copper & Gold (NYSE:FCX), to about 910,000 shares. This was up from about 780,000 shares at the beginning of the quarter. Freeport-McMoRan Copper & Gold (NYSE:FCX) has also been taking hits to its business: the stock is down 21% in the last 52 weeks and its revenue and earnings both decreased in the company’s most recent quarter compared to the same quarter in 2011. Copper prices are closely tied to global economic activity (the stock’s beta is 2.3), so the company is at risk from a global slowdown.

Schlumberger Limited (NYSE:SLB)’s oilfield services focus helped it make our list of the ten most popular energy stocks among hedge funds for the first quarter, and Astenbeck was one of the funds which reported a position. As with several other of these stocks, the fund kept its position in Schlumberger Limited (NYSE:SLB) unchanged over the course of the second quarter and finished June with about 470,000 shares in its portfolio. Schlumberger has been successfully growing its business as onshore development heats up in the U.S., and trades at 15 times forward earnings.

Astenbeck didn’t make many major changes to its top positions during the second quarter of 2012. Looking at its top five holdings, the only one which saw an increase was miner Freeport-McMoRan, the company most exposed to global macro demand. Perhaps this is an indication that Astenbeck doesn’t want to make a call on the direction of the oil industry- the focus of many of its other top holdings- but it feels bullish on the global economy.

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