Billionaire Israel Englander‘s hedge fund Millennium Management, disclosed an equity portfolio valued at some $47.19 billion as of the end of 2014, representing a significant growth of 19.3% from the previous quarter. The equity portfolio is mainly invested in Financial (18.9%), Healthcare (16.8%), and Energy (14.9%) stocks. Millennium Management’s last 13F filing showed that the fund raised its exposure towards financial and heathcare stocks, but Mr. Englander reduced his holdings in the energy and utilities sector. Among 10 largest holdings from Millennium Management’s equity portfolio (which amass 6.12% of the total portfolio value), some companies belong to the energy sector. Let’s take a look at three of these holdings, which are represented Anadarko Petroleum Corporation (NYSE:APC), Cameron International Corporation (NYSE:CAM) and Pioneer Natural Resources (NYSE:PXD).
Two of these companies are large-cap stocks and the other is a mid-cap stock. It is important to mention that mimicking the activity of hedge funds by investing in their large-cap picks is not the best strategy for retail investors, since our tests of a portfolio consisting of 50 most popular picks among hedge funds underperformed the market by 7.0 basis points per month between 1999 and 2012. On the other hand small-cap picks have a better chance of helping an investor to beat the market, since our small-cap strategy returned 132% since the end of August 2012 until March 2015 and outperformed the market by more than 79 percentage points during this period.
At the end of 2014, Pioneer Natural Resources (NYSE:PXD) represented Millennium’s first-largest holding in terms of value in the energy sector. During the fourth quarter, Millennium Management surged its stake by 1210% on the quarter to 1.92 million shares, valued at $286.5 million. The holding experienced one of the most significant increases in the fund’s equity portfolio during the last three months of 2014. Meanwhile, the stock plummeted by 21.6% during the October-December period.
Pioneer Natural Resources (NYSE:PXD) has posted financial results for the fourth quarter of 2014, which showed a revenue growth of 4.72% on the year. Further, the net income reversed negative results obtained in the same quarter of 2013, to $431 million from -$1367 million. Along with this, earnings per share (EPS) have significantly increased to $2.90 from -$6.30.
The actual scenario of lower crude prices constitutes a risk for the oil and gas exploration and development company, with an important impact in the margins of the income statement. Other companies facing the same macro situation are Chevron Corporation (NYSE:CVX), ConocoPhillips (NYSE:COP) or Exxon Mobil Corporation (NYSE:XOM).
Several investors reported long positions in the company. John H. Scully and Andreas Halvorsen are two prominent shareholders of Pioneer Natural Resources (NYSE:PXD), holding 6.85 million shares and 6.59 million shares respectively. Scully has increased his position in the company by 25% during the fourth quarter, while Halvorsen has inched down its stake by 3%.