Brazil’s leading investment firm 3G Capital recently submitted its 13F filing with the Securities and Exchange Commission, revealing a US equity portfolio worth $1.66 billion, as of December 31. The firm was founded by billionaire Jorge Paulo Lemann in 2004 and over the past few years has become famous for being a part of some of the largest M&A deals in the US. Our analysis on 3G Capital’s 13F holdings in companies worth over $1 billion shows that the 39 long positions held by the fund in 2015 delivered a weighted average loss of 6.7% for the year. To perform better in 2016, its latest 13F filing reveals that the fund geared up in a major way during the final quarter of 2015. According to the filing, 3G Capital’s US equity portfolio had a turnover of 112.50% during the fourth quarter and it made a notable increase in its exposure to the energy sector during that period. At the end of December, energy stocks alone amassed over one-third of the value of the firm’s US equity portfolio. Since 3G was betting big on a turnaround in the sector going into 2016, in this post we will focus on the five largest equity stakes it initiated in the sector during the fourth quarter.
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#5 Cimarex Energy Co (NYSE:XEC)
– Shares Owned by 3G Capital (as of December 31): 300,000
– Value of Holding (as of December 31): $26.81 Million
Though shares of Cimarex Energy Co (NYSE:XEC) fell in December, they have been fairly resilient to the slump in the broader market this year, trading down 3.5% year-to-date. On February 17, the company reported its fourth quarter earnings, declaring a loss of $0.25 per share on revenue of $311.30 million versus the analysts’ projection of a per share loss of $0.21 on revenue of $340.60 million. For the same quarter of the previous financial year, the company had reported EPS of $0.87 on revenue of $538.55 million. On February 23, the company declared a dividend of $0.08 per share, decreasing it by 50% from the $0.16 per share dividend it has been paying for the past six quarters. Billionaire Israel Englander‘s Millennium Management reduced its stake in Cimarex Energy Co (NYSE:XEC) by 56% to 674,207 shares during the fourth quarter.
#4 EQT Corporation (NYSE:EQT)
– Shares Owned by 3G Capital (as of December 31): 750,000
– Value of Holding (as of December 31): $39.1 Million
The fall in natural gas prices weighed heavily on EQT Corporation (NYSE:EQT)’s stock last year. However, this year the stock has bounced back and is trading with year-to-date gains of 6.5%. On February 19, EQT Corporation (NYSE:EQT) announced a public offering of 6.5 million shares with options to purchase an additional 975,000 shares. In its offering, the company mentioned that it might use the proceeds from this offering to repay some of its debt. On February 23, analysts at Deutsche Bank reiterated their ‘Buy’ rating on the stock, but lowered their price target on it to $74 from $76. Investing legend billionaire George Soros‘ Soros Fund Management made a more than fourteen-fold increase to his stake in EQT Corporation to 1.45 million shares during the October-December period.