The Top Five Energy Picks of a Multi-Billion Dollar Fund

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In BP plc (ADR) (NYSE:BP), Pzena trimmed its position by 14% during the second quarter, reporting ownership of 9.74 million shares valued at $297.53 million. Since the beginning of October, the stock has advanced by more than 14%, offsetting its year-to-date decline, which currently amounts to around 9%. Amid a decline in oil prices, BP plc (ADR) (NYSE:BP)is embarking on a wide cost-cutting plan, under which it could break even with oil at $60 a barrel in around two years. The oil is currently trading lower than $60, though with Brent at around $47 and WTI at $44. However, other oil giants are also projecting their cost reductions to break even at $60. Meanwhile, 33 investors from our database held around 0.80% of BP plc (ADR) (NYSE:BP)’s outstanding stock at the end of June.

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On the other hand, in Royal Dutch Shell plc (ADR) (NYSE:RDS.A), Pzena increased its stake by 23% to 9.27 million shares valued at $439.19 million. Royal Dutch Shell plc (ADR) (NYSE:RDS.A)’s last financial results were quite disappointing, the company halting several projects, which resulted in a $7.9 billion impairment charge, which reduced its bottom line to a loss of $7.40 billion, compared to $4.5 billion a year earlier. Nevertheless, Royal Dutch Shell plc (ADR) (NYSE:RDS.A) pays a $0.94 quarterly dividend, which gives its stock a yield of 7.24% and it intends to maintain the same dividend policy even amid the current environment.

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In Exxon Mobil Corporation (NYSE:XOM), Pzena also added some 1.91 million shares, reporting a stake containing 6.11 million shares valued at $454.26 million, which ranked as the fifth-largest in terms of value. Low crude prices sparked a lot of talks among investors and analysts lately, as oil giants like Exxon Mobil Corporation (NYSE:XOM) are undertaking severe cost reductions in order to keep returning capital to shareholders through dividends. The main concern is that the high dividends won’t be sustainable at the current oil prices, although they are most likely to rebound in the next couple of years. Meanwhile, investors with a lot of capital can buy shares of energy companies on the cheap and stick to their positions for a while in order to reap higher profits. Another investor that is bullish on Exxon Mobil Corporation (NYSE:XOM) is billionaire Ken Fisher‘s Fisher Asset Management, which owns 5.47 million shares as of the end of September.

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Disclosure: none

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