SPO Advisory and Wexford Capital Disclose Moves in Energy Stocks

So while sentiment is currently positive on Oasis Petroleum Inc. (NYSE:OAS) at its vastly decreased price, the same can’t be said of Diamondback Energy, Inc. (NASDAQ:FANG), at least among hedge funds. Despite suffering a 22% drop of their own since late July, investors still aren’t satisified with the stock at its current price.

Wexford’s latest sale of over 1 million shares is just the latest such move for the Greenwich, Connecticut-based fund, which was founded in 1994, and now manages a number of different hedge funds and private equity funds, with the energy sector being one of their areas of expertise. Once the largest shareholder of Diamondback Energy, Inc. (NASDAQ:FANG)’s among institutional investors with 7.2 million shares, which also made it the top pick in Wexford’s equity portfolio, they have since cut their exposure to Diamondback by more than 50% since September 30, with their latest sale bringing them under the 3.3 million share mark.

That continues a long run of trimming their exposure to Diamondback Energy, Inc. (NASDAQ:FANG), which dates all the way back to last year, when they began selling off a holding that once represented nearly 25% of their entire equity portfolio, as they owned 16.4 million shares at one point shortly after Diamondback’s IPO. It may simply be a case of Wexford taking profit from their once-sizable investment, as they’ve sold a majority of their holding at values three to four times what they initially purchased it for.

Despite Wexford’s continuing sell-off, analysts are high on the stock. First Call Corporation recently updated their rating on it to ‘Buy’, while several other analysts have recently reiterated ‘Buy’ ratings on the stock, including Canaccord Genuity, Wunderlich, and Roth Capital. Price targets on the stock typically fall in the $75.00 to $85.00 range, a healthy premium above its current price of $66.84.

Diamondback Energy, Inc. (NASDAQ:FANG), an independent oil and natural gas company, announced on January 21 that it was conducting an underwritten public offering of 1,500,000 shares of its common stock. Proceeds from the sale will be used to pay down some of the company’s debt. Other hedge funds with investments in Diamondback include Ken Griffin‘s Citadel Investment Group with 1.93 million shares as of September 30, Rob Citrone‘s Discovery Capital Management with 1.46 million shares, and Israel Englander‘s Millennium Management with 880,496 shares.

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