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

Offshore drilling contractor Noble Corporation (NYSE:NE) was another energy pick. Noble had a 15% decline in net income in the third quarter compared to the same period in 2011, despite rising revenue, but Wall Street analysts apparently think that the company will bounce back. The current market cap of $8.6 billion represents 17 times the company’s trailing earnings, but only 8 times expectations for 2013. Point State Capital- which is managed by several former portfolio managers at Druckenmiller’s Duquesne Capital- was another buyer of the stock last quarter (find more stocks Point State was buying).

Druckenmiller reported owning 2.7 million shares of Cheniere Energy, Inc. (NYSE:LNG), which primarily operates terminals for liquefied natural gas. It is unprofitable on a trailing basis, and expected to be unprofitable next year as well, but liquefied natural gas is seen as an attractive investment opportunity given its prospects as a fuel source (including as an export). Billionaire George Soros increased his own holdings to nearly 4.6 million shares by the end of September (see Soros’s favorite stocks). We think that we would prefer to wait until the company is actually looking at breaking into the black.

Halliburton Company (NYSE:HAL) was yet another energy stock that Druckenmiller hadn’t owned at the beginning of July but had decided to buy by the end of the quarter, at which point he owned 1.1 million shares. The energy services company trades at 11 times earnings, whether we consider historical financials or expectations for next year, and the five-year PEG ratio is 0.6 as the sell-side expects moderate growth over the next several years. Net income has been down, but we think that it and its larger peer Schlumberger merit further research. Omega Advisors, which is run by billionaire Leon Cooperman, increased its own stake by 26% last quarter (here are more of Cooperman’s stock picks).