Billionaire Israel Englander’s Energy Stock Picks Include Apache Corporation (APA)

Millennium was a heavy buyer of Apache Corporation (NYSE:APA) between January and March, with its stake in the company increasing to a total of 1.4 million shares. Revenue and earnings were each down 10% in Apache’s most recent quarter compared to the same period in the previous year. However, the sell-side expects the company to rebound strongly and as a result the forward P/E is 9- reflecting a large expected increase in earnings per share. D.E. Shaw, a large hedge fund managed by billionaire David Shaw, owned 1.2 million shares of Apache Corporation (NYSE:APA) according to its own 13F (find D.E. Shaw’s favorite stocks).

According to the 13F, Englander and his team had 2.2 million shares of Baker Hughes Incorporated (NYSE:BHI), a $20 billion market cap oilfield equipment and services company best known for its drill bits, in its portfolio. Analyst expectations are high here as well, as shown by the respective trailing and forward earnings multiples of 17 and 11. Results were not particularly good in the first quarter of 2013, with both revenue and earnings down versus a year earlier, but in theory Baker Hughes Incorporated (NYSE:BHI) would stand to benefit from a further ramping up of drilling activity.

The fund increased its stake in Marathon Petroleum Corp (NYSE:MPC) – an oil and gas refining and marketing company which was spun out from Marathon Oil Corporation (NYSE:MRO) in 2011- to over 1 million shares by the end of March. Both the trailing and forward earnings multiples are 8, as the market is generally assigning cheap valuations to downstream energy companies. We’d note that the stock price has more than doubled in the last year, over a period when business seems to have expanded nicely. Billionaire Andreas Halvorsen’s Viking Global bought 2.8 million shares of Marathon Petroleum Corp (NYSE:MPC) during Q1 (see Halvorsen’s stock picks).

Disclosure: I own no shares of any stocks mentioned in this article.