Pioneer Natural Resources (PXD), Apache Corporation (APA) & Billionaire T. Boone Pickens’s Top Q1 Stock Picks

Goodrich Petroleum Corporation (NYSE:GDP) was another of the fund’s top picks. The stock’s market capitalization is only about $500 million, but on average, over 1 million shares are traded per day, making for plenty of dollar volume. Another E&P company, Goodrich focuses on U.S. shale plays including the Eagle Ford and Haynesville in the Texas-Louisiana region. It has actually been unprofitable for the last several quarters, driving the stock price down 15% in the last year as the market has risen strongly, and the most recent data shows that 27% of the float is held short.

Pickens and his team kept their stake in Devon Energy Corp (NYSE:DVN) about constant between January and March. Devon is primarily a natural gas producer- only about a sixth of its energy production is oil- and as such natural gas and natural gas liquids together actually account for most of the company’s revenue. Analyst consensus shows little change in adjusted earnings per share this year against 2012 numbers, but then a sizable increase in 2014 which results in a forward earnings multiple of 12. That is a somewhat attractive figure, but it does seem to depend on improvement in demand for natural gas and NGLs.

The 13F reported that the fund owned almost 80,000 shares of oil major Occidental Petroleum Corporation (NYSE:OXY) at the beginning of April, up from about 60,000 shares at the beginning of this year. Compared to some of its peers, Occidental looks quite expensive with trailing and forward P/Es of 17 and 13 respectively, and business has been down as well. We’d note that at current prices and dividend levels Occidental’s dividend yield is nearly 3%. Still, we’d suggest comparing the company to peers such as Exxon Mobil or BP for large energy companies that offer better value, income, or both.

Final thoughts

There’s no denying that T. Boone Pickens is one of the most successful oil investors of our time. For market participants looking to establish an energy-focused portfolio of their own, BP Capital is a nice play to start. Though Occidental’s valuation isn’t particularly attractive, it’s likely that Pickens is focused on its ability to not get bogged down by refining, instead serving more as a pure-oil play. Devon, Pioneer and Goodrich are “comeback” NG/NGL bets, while Apache’s prospects are strong in the value arena.

Disclosure: I own no shares of any stocks mentioned in this article.