Billionaire T. Boone Pickens’ High Upside Potential Picks Include Transocean

Halliburton Company (NYSE:HAL), another equipment and services company, was also one of Pickens’s picks at a position of about 150,000 shares. Halliburton was one of the most popular energy stocks among hedge funds for the fourth quarter of 2012 (check out more energy stocks hedge funds loved). Net income was down 26% in the fourth quarter of 2012 versus a year earlier despite a rise in sales. However, Wall Street analysts are expecting a recovery over the next couple years as can be seen from the fact that the trailing and forward earnings multiples are 14 and 10 respectively.

According to the filing Pickens kept his position in offshore driller Transocean LTD (NYSE:RIG) about constant at a little over 110,000 shares. Transocean’s revenue numbers have been ticking up, though the company is still experiencing poor sentiment related to the Deepwater Horizon disaster. Consensus earnings for 2014 imply a forward P/E of only 9, which would be low as long as the company could keep its business steady from that point forward. Billionaire Carl Icahn has bought over 5% of Transocean’s outstanding shares (see Icahn’s stock picks) and is urging the company to return more cash to shareholders.

Pickens initiated a position of about 420,000 shares in Weatherford International Ltd (NYSE:WFT), another oil and gas equipment and services company, in the fourth quarter of 2012. At a market capitalization of $9 billion, Weatherford is valued at 9 times forward earnings estimates following a 34% decline in price in the last twelve months. Revenue growth was 9% in its most recent quarter compared to the same period in the previous year. Billionaire Jeffrey Vinik was also buying Weatherford and owned 5.5 million shares after not having any long position at the end of September.

Disclosure: I own no shares of any stocks mentioned in this article.

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