Russell Lucas‘ Red Bank, New Jersey-based Lucas Capital Management is focused on investments in the energy sector. Deducing from the fund’s latest filing, the sector represented about 43% of the value of its equity portfolio, though this was down slightly from 47% at the end of December. Although the energy sector is up by some 12.8% so far this year, it has been an extremely rocky and highly volatile ride. Let’s take a look at how Russell Lucas has geared his fund’s portfolio to ride the recovery in energy prices in the current quarter and beyond.
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#5 Pioneer Natural Resources (NYSE:PXD)
– Shares Owned by Lucas Capital (as of March 31): 16,700
– Value of Holding (as of March 31): $2.36 Million
The $27.21 billion oil and gas exploration and production company might seem to have lost some of Mr. Lucas’ confidence, as he slashed his fund’s stake in the company by 24% during the first trimester. However, considering that Pioneer Natural Resources (NYSE:PXD)’s stock price is up by a whooping 32% so far this year, the move might very well have been one of profit-taking. Despite first quarter revenue coming in lighter-than-expectations, a number of analysts including Stigel, Topica Capital Markets, Wunderlich, and RBC Capital Markets appeared to be upbeat about the company’s bottom-line beat and raised their price targets on the stock. With 9.37 million shares valued at $1.17 billion, Andreas Halvorsen‘s Viking Global was the largest stockholder of Pioneer Natural Resources (NYSE:PXD) within our database at the end of last year.
#4 Exxon Mobil Corporation (NYSE:XOM)
– Shares Owned by Lucas Capital (as of March 31): 35,000
– Value of Holding (as of March 31): $2.92 Million
Lucas Capital’s Exxon Mobil Corporation (NYSE:XOM) holding remained largely unchanged during the January-to-March period and represented 2.13% of the value of the fund’s portfolio. Although trading nearly sideways over the last 12 months, the $371 billion energy company’s stock has appreciated by 14.2% year-to-date alongside the broader rebound in the industry. A loss in the upstream segment and a decline in earnings from the downstream segment on a year-over-year basis wasn’t enough to hold the company back from beating both the top and bottom-line estimates for its first quarter financial results, thanks to a rise in Exxon Mobil Corporation (NYSE:XOM)’s earnings from the chemical segment. Ken Fisher‘s Fisher Asset Management reduced its Exxon holding by 16% to 4.54 million shares during the first quarter.
We power through the top three energy stock picks of Lucas Capital on the next page.