Success in the oilfield made T. Boone Pickens a billionaire, and he currently manages a good deal of his own money alongside that of clients in his hedge fund BP Capital, focusing on energy related investments. Our database of quarterly 13F filings tracks activity from hundreds of hedge funds as part of our work researching investment strategies (we have found, for example, that the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year) and also like to compare filings from top managers to their previous ones in order to see which stocks they added to their portfolio. We have gone through BP Capital’s most recent 13F and here are our thoughts on Pickens’s five largest new positions from the first quarter of 2013 (or see the full list of stocks he reported owning):
The fund bought over 120,000 shares of Apache Corporation (NYSE:APA) making that stock Pickens’s second largest 13F holding by market value as of the end of March. While the oil and gas company’s revenue and earnings both declined by 10% last quarter compared to the first quarter of 2012, analysts are expecting Apache Corporation (NYSE:APA) to recover next year and do so quite strongly: their consensus forecasts for 2014 imply a forward P/E of 9. Billionaire Israel Englander’s Millennium Management increased its stake in Apache Corporation (NYSE:APA) to a total of 1.4 million shares during the first quarter of the year (check out Englander’s stock picks).
Pickens and his team were buying several oil and gas refining and marketing companies between January and March, including almost 100,000 shares of Tesoro Corporation (NYSE:TSO). Even after the stock has risen over 160% in the last year, the trailing earnings multiple is only 10 (though we’d note that downstream oil and gas companies generally carry low multiples in the current environment, and this is actually a premium to some of Tesoro Corporation (NYSE:TSO)’s peers). SAC Capital Advisors, managed by billionaire Steve Cohen, more than tripled its own holdings of Tesoro Corporation (NYSE:TSO) and owned 1.2 million shares according to its own 13F (research more stocks SAC was buying).