Billionaire Stanley Druckenmiller has technically closed Duquesne Capital to investors, but the investment manager (who had been one of George Soros’s portfolio managers, as well as running his own fund) still issues 13F filings and so investors can still track some of his activity. We have compared Druckenmiller’s filing for the third quarter of 2012 to the one from the end of June to identify new positions that he moved into during this period. Read on for our quick take on the five largest new holdings reported on the 13F or see the full list of Druckenmiller’s stock picks.
Exxon Mobil Corporation (NYSE:XOM) was Druckenmiller’s largest 13F holding by market value, even though he had not owned any shares at the beginning of July. Oil majors are generally trading cheaply, and while market leader Exxon Mobil carries a premium to many of them its forward P/E multiple is still fairly low at 11. Fellow billionaire Ken Fisher’s Fisher Asset Management was also buying Exxon Mobil during the third quarter (check out more stocks Fisher has been buying). While earnings were down slightly last quarter versus a year earlier, we’d consider Exxon Mobil a potential value stock as it’s not much more expensive than (for example) BP but is likely a more stable long-term investment.
Another oil major that was new to the portfolio was Chevron Corporation (NYSE:CVX), with Druckenmiller owning about 760,000 shares. Chevron trades at 9 times earnings- on either a trailing or a forward basis- so it is a bit cheaper than Exxon Mobil though it isn’t as much of a market leader. We’d also note that Chevron’s revenue was down 10% in the third quarter compared to the same period in 2011, which contributed to a 33% decline in net income. We don’t think that the oil and gas company will continue declining much, but it’s quite possible that it’s worth it to pay the small P/E premium for Exxon Mobil instead.