Is Callon Petroleum Company (NYSE:CPE) a buy? John Labanowski, the manager of Brenham Capital Management, seems to think so, judging by his fund’s recent filing with the Securities and Exchange Commission. As reported in the filing, Brenham Capital has increased its stake in Callon Petroleum to 4.3 million shares, which account for roughly 6.5% of the company’s common stock. In its latest 13F filing, the fund had reported ownership of 1.6 million shares, so this move represents a 168% increase in its stake.
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Callon Petroleum Company (NYSE:CPE) engages in the exploration and production of oil and natural gas, and is focused in the Permian Basin, located in the western part of Texas. Like the rest of the oil industry, the company has seen its revenues squished by the 2014 fall in the oil prices, posting $30.4 million in revenues for the first quarter of 2015, down by 8% compared to the first quarter of 2014 and 21% below the revenue reported for the last quarter of 2014. Earnings per share turned to red as well, with Callon Petroleum reporting a loss of $0.17 for the three months ending March 31, 2015. Despite the fact that oil prices still don’t have a clear trend, analysts expect the company to return to profitability, predicting revenues of $39.1 million and flat EPS for the second quarter.
Among the funds we track, the largest shareholder of Callon Petroleum is Jeffrey E. Eberwein’s Lone Star Value Management, which owns 2.76 million shares. Both Lone Star and Brenham initiated stakes in the company during the first quarter. Other investors with long positions include J. Carlo Cannell’s Cannell Capital and GRT Capital Partners, managed by Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk.
Focused exclusively on energy stocks, Brenham Capital was founded by Labanowski in 2012. In the buildup to establishing his own hedge fund, Labanowski learned his trade at Deutsche Bank, where he served in the Energy Group, and Goldman Sachs, where he was a part of the Natural Resources Group, before moving to Walker Smith Capital, where he headed its energy investment division. In February 2014 Brenham Capital announced an agreement with Aurora Investment Management L.L.C., whereby the latter would provide Brenham’s funds with early stage capital.