Pioneer Natural Resources (PXD): Andreas Halvorsen Ups Stake While Other Investors Sell Oil Stocks

Tiger Cub Andreas Halvorsen thinks that Pioneer Natural Resources (NYSE:PXD) is a good investment and upped its position in the company, despite the fact that the stock lost some ground over the last months. As a new filing with the Securities and Exchange Commission, Viking Global, the hedge fund managed by Mr. Halvorsen reported holding almost 6.74 million shares, which represent 4.7% of the company. Previously, Viking held around 4.07 million shares, according to its latest 13F filing. The stake held by the fund is passive by nature.

Andreas Halvorsen

Viking Global has been holding Pioneer Natural Resources (NYSE:PXD) since the first quarter of 2014. Initially the fund held around 1.64 million shares, later upping the position by around 140%. The stock of Pioneer declined by around 1.7% since the beginning of the year. However, this is not the only bullish move that the fund disclosed recently. Over a week ago, Viking reported a new stake in Wayfair Inc (NYSE:W), a company that went public at the beginning of the month and also lost a lot of ground, dropping from over $37 to slightly above $25 over the last couple of weeks. Nevertheless, Viking is one of the largest shareholders, owning around 13% of the company’s Class A stock.

Despite the underperformance of these two holdings, Mr. Halvorsen might be betting on the stocks to rebound, since many investors have been bullish, despite markets’ volatility and sharp losses over the last several months. Mr. Halvorsen is a former employee of Julian Robertson’s Tiger Management and has had impressive returns over the last decade, returning over 119% overall since 2005 to 2010.

Pioneer Natural Resources (NYSE:PXD) performed worse in comparison to many other large cap independent oil & gas companies  in terms of stock price. However, the company has been posting growth in its net income. For the second quarter, Pioneer Natural Resources (NYSE:PXD)’s EPS amounted to $1.35 in the second quarter, beating the consensus estimate of $1.29 and the last year result of $1.10. The revenue however, slightly declined to $953 million from $1.20 billion in the same period of last year, and slightly missed the estimate.

Aside from Viking, another investor that owns shares of Pioneer Natural Resources (NYSE:PXD) is John H. Scully‘s SPO Advisory Corp, which reported holding over 5.03 million shares as of the end of the second quarter. Among insiders, Executive Vice President Chris Cheatwood has sold around 12,500 shares at prices ranging from $182 and $204 per unit since the beginning of the year. These transactions brought Mr. Cheatwood some impressive profits, taking into account that he acquired shares back in 2010, paying around $22 per share.

One of the reasons for Mr. Halvorsen raising its stake in Pioneer is company’s optimism regarding the future. Back in August, the CEO of the company, Scott Sheffield said during an interview that Pioneer Natural Resources (NYSE:PXD) has been one of the companies that profited significantly from the US energy boom and it will still continue to do so. Mr. Sheffield said that US oil production was significantly impacted by the latest-discovered oil fields.

However, overall experts predict that oil demand will continue to decline, despite the supply going up. This can be already seen in a significant drop in oil prices over the last several months with the Brent dropping from over $115 earlier in May to just above $80. Even though the demand is expected to pick up next year, the future is still uncertain with experts constantly revising down their demand growth expectations.

On the back of these news, many investors have been reducing their exposure to oil companies, which are expected to reduce their spending, in order to keep their profits in line. Only yesterday we have reported about John Paulson‘s hedge fund Paulson & Co. slightly reducing its position in Cobalt International Energy, Inc. (NYSE:CIE) by selling 103,500 shares. We have also witnessed recently Fir Tree Partners cutting its position in Noble Corp plc (NYSE:NE), and Barry Rosenstein‘s JANA Partners closing its stake in QEP Resources Inc (NYSE:QEP), previously holding over 7% of the company.

With this in mind, taking into account Mr. Halvorsen’s impressive track record over the years, his bullish move on Pioneer Natural Resources (NYSE:PXD) looks rather interesting. The company also represents one of the top holdings of Viking’s equity portfolio, amassing around 5% of the total value. Moreover, analysts also seem to like this stock, with the consensus rating being ‘Overweight’ and average target price topping $234 per share, which represents a significant premium.

Disclosure: none