Adage Capital Increases Stake In This Driller Amidst Low Oil Stock Prices

As oil stocks continue to decline, Phill Gross And Robert Atchinson’s Adage Capital Management decided to increase its exposure to Pacific Drilling SA (NYSE:PACD) by more than 12%. After adding more than 1.26 million shares to its holdings, the fund owns 11.45 million Common Shares, which account for 5.27% of the company’s outstanding stock.

Adage Capital Management is a Boston-based hedge fund founded by Phill Gross and Robert Atchinson in 2001. Prior to creating this firm, Gross was a partner at HMC, where he spent 18 years, and, before that, he served as a healthcare and retail analyst at the Harvard Management Company. Atchinson was also at the Harvard Management Company from 1991 to 2001. The fund’s current equity portfolio is highly diversified and is worth more than $40.4 billion.

Pacific Drilling SA (NYSE:PACD) is a $967.87 million market cap international offshore drilling contractor committed to becoming the preferred provider of ultra-deepwater drilling services to the oil and natural gas industry through the use of high-specification rigs. As oil stock prices continue to fall on the back of lower oil prices, triggered by excess supply and reduced demand, this company is not except. Nonetheless, many major hedge funds seem to be betting on a rebound some time soon and are, thus, buying oil stocks like crazy.

Ken Griffin’s Citadel Investment Group recently boosted its wage on C&J Energy Services Inc (NYSE:CJES) to 2.84 million shares; Daniel Lewis’ Orange Capital surged its exposure to Bellatrix Exploration Ltd (NYSE:BXE), from 23.8 million shares held earlier, to 25.8 million shares; and Steve Cohen’s Point72 Asset Management augmented its bet on Jones Energy Inc (NYSE:JONE) to 5.1% of the company’s Class A stock,  just to provide a few examples.

On top of Adage Capital Management, which stands as the largest institutional investor in Pacific Drilling SA (NYSE:PACD), other major funds are also betting on this stock. For instance, Jeffrey Tannenbaum’s Fir Tree disclosed ownership of 5.81 million shares by the end of the third quarter, while Citadel Advisors acknowledged holding 2.81 million shares, after adding 478,201 shares to its portfolio over the third quarter.

Another stock on which Adage is quite bullish is Rexnord Corp (NYSE:RXN). Quite recently, the fund increased its stake in the company from 2.52 million shares, to 5.37 million shares, which account for 5.28% of Rexnord’s common stock.

Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned