Billionaire Jorge Paulo Lemann’s New Energy Bets

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#3 Diamondback Energy Inc (NASDAQ:FANG)

– Shares Owned by 3G Capital (as of December 31): 800,000

– Value of Holding (as of December 31): $53.52 Million

In the wake of a collapse in oil and natural gas prices, Diamondback Energy Inc (NASDAQ:FANG) has emerged as one of the most resilient stocks in the industry. While most energy stocks have plummeted heavily during the past few quarters, shares of Diamondback Energy Inc (NASDAQ:FANG) have been trading in the $60 -$80 range for the past two years and are currently trading up by over 2% year-to-date. The company managed to beat earnings expectations recently when it posted its fourth quarter numbers. While analysts had expected EPS of $0.44 on revenue of $135.19 million, it delivered EPS of $0.58 on revenue of $114.30 million. Of the 34 prominent analysts who cover the stock, 27 currently have a ‘Buy’ rating on it. Moreover, those 34 analysts have an average price target of $81.03 on the stock. Dmitry Balyasny‘s Balyasny Asset Management also initiated a stake in the company during the fourth quarter by purchasing 291,500 shares.

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#2 Suncor Energy Inc. (USA) (NYSE:SU)

– Shares Owned by 3G Capital (as of December 31): 3 Million

– Value of Holding (as of December 31): $77.4 Million

Suncor Energy Inc. (USA) (NYSE:SU) was 3G Capital’s fourth-largest equity position at the end of the fourth quarter. Though shares of the company have declined by over 24% in the past one year, it has helped in raising its annual dividend yield to 3.62% currently. Last month, the company announced that it will be acquiring Canadian Oil Sands in a $4.2 billion deal. After the completion of this deal, Suncor Energy Inc. (USA) (NYSE:SU) will have a majority stake in two of the three largest mining projects currently in operation at Athabasca oil sands. Interestingly, on February 18, Canadian Oil Sands became the first major Canadian oil producer in at least a decade to receive a junk credit rating from Moody’s. On February 12, analysts at Citigroup upgraded Suncor Energy’s stock to ‘Buy’ from ‘Neutral’. Cliff Asness‘ AQR Capital Management reduced its stake in the company by 28% to 3.15 million shares during the October-December period.

#1 Exxon Mobil Corporation (NYSE:XOM)

– Shares Owned by 3G Capital (as of December 31): 1 Million

– Value of Holding (as of December 31): $77.95 Million

Energy behemoth Exxon Mobil Corporation (NYSE:XOM) represented 3G Capital’s largest new stake and its third largest equity position overall at the end of December. Shares of the company are currently trading in the green for 2016 due to better-than-expected fourth quarter numbers it reported earlier this month. On February 19, the company revealed that it added 1 billion barrels oil equivalent (boe) of proven oil and gas reserves in 2015, which will be able to replace only 67% of its production. This was the first time in last 22 years that the company couldn’t replace all of the oil and gas it pumped with acquisitions and discoveries. Some analysts believe that due to the aggressive pace at which the company bought back its shares in the last five years, it can slash its dividend in the future if the oil prices continue to be where they are now. On February 23, Roger Read, energy analyst at Wells Fargo, named Exxon Mobil Corporation (NYSE:XOM) among his top picks in the E&P sector and raised his valuation range for the stock to $89-$98.

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Disclosure: None

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