Brenham Capital Management is a Texas-based investment advisory firm managed by John Labanowski. The firm’s primary focus is in the energy sector, managing both domestic and offshore funds. At the end of the June quarter, the fund’s public equity portfolio was worth around $781.46 million. In the third quarter, its stock picks returned 16.64%, when looking at its 10 holdings in companies which were worth $1 billion on more on June 30. We recommend investors consider hedge funds’ long stock picks for their market-beating potential and will share four of them in this article, which were U.S. Silica Holdings Inc (NYSE:SLCA), Diamondback Energy Inc (NASDAQ:FANG), Continental Resources, Inc. (NYSE:CLR), and Callon Petroleum Company (NYSE:CPE).
The first stock we are going to analyze is U.S. Silica Holdings Inc (NYSE:SLCA), a company that produces a specialized mineral, called silica, and runs in two segments: Industrial & Specialty Products, and Oil & Gas Proppants. During the second quarter, Brenham Capital Management decided to boost its stake in the company by 300%, to 2 million shares, creating a position that accounted for 8.82% of its portfolio’s value. This was a smart move for the fund, since in the next three months the stock advanced by 35.3%.
At the end of the second quarter, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, an 11% decline from one quarter earlier. The largest stake in U.S. Silica Holdings Inc (NYSE:SLCA) was held by Millennium Management, which reported holding $92.5 million worth of stock at the end of June. It was followed by Ariel Investments with an $89.4 million position. Other investors bullish on the company included Alyeska Investment Group and Senator Investment Group.
Another stock that was in Brenham Capital Management’s equity portfolio at the end of June and delivered a positive return in the third quarter was Diamondback Energy Inc (NASDAQ:FANG), an oil and natural gas company. The fund actually lowered its stake by 50,000 shares during the June quarter, hence holding a position that was valued at $114.01 million, and the stock returned 5.8% in the three months that followed. On a year-to-date basis, the company’s shares have gained 45.55%.
At Q2’s end, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, down by 3% from the previous quarter. One of the largest stakes in the company in the June quarter was held by Zimmer Partners, led by Stuart J. Zimmer, worth $89.7 million; 2.7% of its 13F portfolio was allocated to the stock. Other professional money managers that were bullish encompassed Alec Litowitz and Ross Laser’s Magnetar Capital, Rob Citrone’s Discovery Capital Management, and Principal Global Investors’s Columbus Circle Investors.
We’ll check out two more of the fund’s stock picks on the next page.