This Mutual Fund Had A Remarkable 2016 And Remains Convinced About Its Top Picks

#2 Barrick Gold Corporation (USA) (NYSE:ABX)

– Shares Held By Goodhaven Capital Management (as of December 31): 2.42 Million

– Value of The Holding (as of December 31): $38.68 Million

Barrick Gold Corporation (USA) (NYSE:ABX) was another stock in which Goodhaven Capital Management lowered its stake substantially during the fourth quarter, by 13%. However, the fund remains exremely optimistic on the company. In its annual letter, Goodhaven’s fund managers applauded the company and its CEO John Thornton for successfully reducing the debt on its balance sheet by $4.5 billion, building significant liquidity and reducing the ‘all-in sustaining costs.’ The fund believes that gold prices will move higher in the coming years if it follows its historical behavior of acting as a hedge against currency depreciation and this obviously will benefit Barrick Gold Corporation (USA) (NYSE:ABX). Shares of Barrick Gold Corporation have appreciated by over 20% so far in 2017, but are still trading below the $20-mark. On February 20, analysts at BMO Capital Markets reiterated their ‘Buy’ rating on the stock and set a price target of $20 per share.

#1 WPX Energy Inc (NYSE:WPX)

– Shares Held By Goodhaven Capital Management (as of December 31): 3.30 Million

– Value of The Holding (as of December 31): $48.14 Million

WPX Energy Inc (NYSE:WPX) remained Goodhaven Capital Management’s largest equity holding at the end of December despite the fund reducing its stake in the company by 19% during the last quarter. In the last year, WPX Energy Inc (NYSE:WPX)’s stock has surged by 217% . Goodhaven thinks this performance was largely due to the company reducing its cost of drilling a well in Bakken formation from $11 million a few years ago to $5.5 million today and by making a major acquisition in Permian Basin in 2015, which proved out to be huge bargain.

“With oil prices now above $50 per barrel and a decent hedge book for 2017 and part of 2018, the company is well positioned to take advantage of the opportunities it has created in recent years. According to a recent corporate presentation, WPX is projecting that its oil output will almost double in the next two years.”

Last month, WPX Energy revealed that it has agreed to acquire $775 million worth of assets that will increase its Permian Basin operation to over 120,000 net acres and deepen the drilling inventory of the company’s top-tier Delaware Basin locations.

Disclosure: None