Exxon Mobil, Chevron, and More: Billionaire Druckenmiller’s Energy Stock Picks

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We have already gone through billionaire Stanley Druckenmiller’s 13F filing for the third quarter of 2012. Even though investors can’t buy all of these stocks, we still think that it can be useful to use these picks as free ideas that can be researched further- or not- as an investor wishes. Our database of filings also allows us to narrow our focus to specific sectors, industries, and valuation categories, and the same logic applies there. See the full list of stocks from Druckenmiller’s 13F or read on for our quick take on the five largest energy holdings in his portfolio:

DUQUESNE CAPITAL

Druckenmiller initiated a position of 1.3 million shares in Exxon Mobil Corporation (NYSE:XOM), making the supermajor of all supermajors the largest holding in his 13F portfolio. Exxon Mobil currently has a market capitalization of just over $400 billion, which places its valuation at 11 times consensus earnings for 2013. That multiple also reflects an expected decline in net income next year. Exxon Mobil made our list of the ten most popular energy stocks for the third quarter (see the full rankings). In the third quarter revenue and earnings at the company were down 7-8%, but we’d consider it as a long term value stock as long as an investor can handle the exposure to oil and gas prices.

Another new addition to the portfolio was Chevron Corporation (NYSE:CVX), another large oil and gas company. Its market cap is about half of Exxon Mobil’s. Chevron also experienced a decline in revenue and earnings last quarter versus a year earlier, though the drop was steeper there: net income, for example, fell by about a third. However, the market gives Chevron an appropriate discount to its larger peer and the trailing and forward P/E multiples both come in at 9. Billionaire Ken Fisher’s Fisher Asset Management added heavily to its position in Chevron last quarter (check out Fisher's stock picks) and we think that it is worth considering as well.

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