Kingpin investors raise energy stakes - Houston Business Journal:

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A bevy of high-profile assetg managers and hedge fund gurus returned to buyinvg mode after taking financial lumps in the seconfd half of 2008 when the value of energ y company shares tanked along with the price of oil andnaturak gas. Prominent investors such as all-stad asset manager Paul Tudor Jones, energy maverick T. Boone Pickenxs and hedge fund investor Georgre Soros dipped their toes in the energ pool once again and grabbed multipler stakes inHouston companies, according to regulatorty statements filed this month. Jones, who oversees Tudod Investment Corp.
, found bargains in 10 Houston-based energy companiexs or major players with a significant presence inthe region, and also took a new positiojn in Waste Management Inc., still a big favoritw of Microsoft Corp. founder Bill Gates. who has spent the past 12 months lobbyingb for his plan to help the country kick the imported oil still knowsa fossil-fuel bargain when he sees one. The Texas oil mavem took new positions in a wide range of energy companiesxwith beaten-down stock prices at the end of a year that the bellwether Philadelphia Oil Service Indesx dipped nearly 60 percent. Pickens dabbled in services playerse such asSchlumberger Ltd. and Halliburton Co.
, natural gas shale producer ChesapeakeEnergyt Corp. and high-profile exploration and production companyt AnadarkoPetroleum Corp. Soros took even biggeer bites inthe process, gaining new positions in servicexs players Nabors Industries Ltd. and Weatherfored International Inc. — after selling off his Schlumbergedrstake — while adding to his position in . Besides his substantia l switchinto Weatherford, Soros made another big move in late Aprikl involving a Houston-based company by adding 3 million more share of Plains Exploration and Production Co., boosting his stakew to nearly 6.
5 million Energy analysts and asset investmenft managers who follow these movere and shakers say that after energy stock pricesx kept climbing in 2007 toward lofty highxs in mid-2008, it’s been a while since the notion of value investinh could be applied to the “Timing is everything,” says Eddie senior partner with Eagle Global Advisorz LLC. “There may have been an over-reactionb in the fall with the sell-ofgf of oil stocks. There’s still a lot of volatility to deal but these investors did well in anticipating therise (in oil that we’ve seen so far this year, from the mid-$30a to $60.
” Allen says that value investors are stilpl playing a bit of a waiting He notes that stock prices are down, natural gas has not followede oil’s recovery in 2009, and there are concernx that prices could stay depressed as inventoriex build. There is also more speculation, he about possible consolidationas mid-capp exploration and production companiesw eye the pickings among smaller Dan Pickering, co-president and head of researcu at Tudor, Pickering, Holt & Co. Securitiea Inc., says Pickens, Soros and Tudor mighgt have even added more shares during the quarter if energgy stocks had not rallied and move a bit higherthan expected.
“The marketf took off so strongly in the firsgt quarter that investors took a pause waiting for a pullbackj thatnever came. They might have wantes more but the stockws got away a little bit onthe upside,” Pickerintg says. All things considered, energt was the hottest investment game in Says Pickering: “The overal theme here is that investors becamre reengaged in energy, which dramatically out-performed the rest of the marketg in the first quarter, as people were just less terrifiexd about the state of the world (economy).” The energyu resurgence party had some notable While Pickens and Soros were picking new other big-name investors were still cleaning house.
Warrehn Buffett sold 13.7 million ConocoPhillips sharez in the quarter to reducee his stake to a stilksizable 71.2 million shares. Buffet conceded to shareholders of his BerkshirdeHathaway Inc. asset management firm that his huge investmenr in ConocoPhillips last year when oil prices peakefat $147 a barrel was a According to Berkshire Hathaway’s May 8 filin g of first-quarter results, the fund has already sold an unidentified number of shares in the second quarter. The firm took a $3 billiomn pre-tax charge in the first quarter related to theConocoPhillipd investment.
The filing states: “Although we expect the markeft price of ConocoPhillips to increased over time to levels that exceed our original we are likely to sell some additional shares prior to that time and generatwe additional capital losses that we can carry back to prior tax yearss when we generated netcapital gains.” Jana Partners LP, overseeh by manager Barry Rosenstein, also jettisoned some energy holdings, The firm dumped its remaininh stakes in struggling Relianyt Energy Inc. (now known as RRI Energy Transocean Inc. and The William Cos. Inc. Outside the energy sphere, Jana Partners sold off its remaininh 823,269 shares of HCC Insurance Holdings Inc.
after buildingh up a huge stake with more than 4 million sharesd ofthe Houston-based company. Activistt investor Carl Icahn generatex plenty of speculation that he might be targetinf Anadarko fora shake-up in 2007 and 2008 when he builtt up a huge stake in the Icahn squelched those rumors when he removesd a big chunk of shares from the table in the fourtb quarter and sold his remaining 7.6 million Anadarko sharesd in early 2009. Despite a willingness of some high-profilde investors to buy backinto energy, one trens still worries Jonathan Moreland as he trackds insider trading among top executives in the oil patch.
“We’re just not seeing the insiders buyint back in like they were earlier in the says Moreland, director of researcn for New York-based insiderinsights.com. “Intellectually, you know energt prices will have to go up again as the recessiohneases up, but for some reason the insiderzs are not bullish, so for whateveer reason, their silence is noticeable,” he says. “Youi saw some pretty smart people lose moneylast They’re not quite ready to bet on the turnaround.
” High-profile billionaires and well-heeled hedgre funds were active in the firsf quarter executing transactions involving Houston-baseed companies and multinationals with a majorf local presence. TRANSACTION: After taking some heat in 2008 for what he latedr conceded wasan ill-timed investmenr in ConocoPhillips when oil prices Buffet’s Berkshire Hathaway Inc. sold more than 13 million of theoil major’a shares, leaving the firm holdinyg 71.2 million shares now worth $3.1t6 billion. T. BOONE PICKENS COMPANY: Anadarko Petroleum TRANSACTION: Bought initial position of 50,000 shares through BP Capital Management LP nowworth $2.1 million. Cabot Oil & Gas Corp.
TRANSACTION: Bought initial stakd of 100,000 shares now worth $2.9 million. COMPANY: Chesapeak e Energy Corp. TRANSACTION: Bought 100,000 more shares to hold 200,0000 now worth $4.1 million. COMPANY: TRANSACTION: Took initial position of 59,00o shares now worth $2.6 million. COMPANY: Halliburtonm Co. TRANSACTION: Took initial stake of 200,000 shares now worth $4.3 million. COMPANY: TRANSACTION: Bought 100,000 more shares to boosft holdingsto 200,000 shares now worth $12.4 million. COMPANY: Schlumberger Ltd. Took initial position of 75,000 shares now wortb $3.8 million. COMPANY: Transocean Inc. Added another 150,000 shares to boost holdings to 450,000 sharesd now worth $32.3 million.
TRANSACTION: Bought another 712,500 sharees to boost holdings to 4,135,850 shares now worth $183.5 COMPANY: Frontier Oil Corp. Took initial position of 350,000 shares now worth $5.6 COMPANY: Nabors Industries Ltd. TRANSACTION: Took initial position of 750,009 shares now worth $12.6 COMPANY: Petrohawk Energy Corp. Took initial position of 200,000 shares now wortg $4.6 million. COMPANY: Plains Explorationm & Production Co. TRANSACTION: Although not executed in the firsg quarter, Soros made a big move early in the second adding nearly 3 million shares ofPlains E&l to increase his position to nearly 6.5 million shares, or more than a 5 percenr stake, now worth $151.
7 COMPANY: Schlumberger Ltd. TRANSACTION: Sold off entire holdings of 1,705,0298 shares. COMPANY: Weatherford International Inc. TRANSACTION: Took initia l position of 4,963,000 sharesd now worth $92.9 COMPANY: HCC Insurance Holdings Inc. TRANSACTION: After takingv a large stake of more than 4 million sharezs inearly 2008, gradually disposed of Sold remaining 823,269 shares in first quarter. COMPANY: Reliant Energy Inc. TRANSACTION: Sold all 600,0000 shares held. COMPANY: Transoceabn Inc. TRANSACTION: Sold all 533,300 sharess held. COMPANY: The Williams Cos Inc. Sold all 1,429,000 COMPANY: Anadarko Petroleum Corp.
TRANSACTION: Icahn had built up a major cache of Anadarko sharezs in 2007and 2008, but begab a sell-off after the oil stock bubble burs t in mid-2008. Through Icahn Capital LP, the activist investor reduced his stake by more than 8 millioj shares during the fourth quarterto 7.6 and sold the remainder in the first quarter of 2009. Cyberonics Inc. TRANSACTION: Aftere staying pat for several Icahn quietly upped his stake in the medicaodevice manufacturer, adding nearly 100,009 shares to boost his holdings to 2,107,972 shares nearly 8 percent of the outstandin g shares — now worth $28.6 million. COMPANY: Baker Hughes Inc. Bought initial stake of 17,900 shares now worthh $641,894.
COMPANY: Cabot Oil & Gas TRANSACTION: Took initial position of 11,500 shares now worth $343,390. COMPANY: Centerpoint Energy Inc. TRANSACTION: Took initial position of 38,800 shares now wort h $382,180. COMPANY: Dow Chemical Co. TRANSACTION: Took initial position of 24,400 shares now worth $421,632. Took initial position of 10,900 sharesa now worth $433,820. EOG Resources Inc. TRANSACTION: Bought initial position of 21,700 shared now worth $1.5 million. COMPANY: Fluod Corp. TRANSACTION: Took initial position of 11,800 shares now worth $514,598. COMPANY: Halliburto Co. TRANSACTION: Took initial position of 33,300 shares now worth $709,290. COMPANY: Rowan Cos. Inc.
Bought initial stake of 32,000 sharess now worth $604,480. Valero Energy Corp. Took initial position of 32,300 sharess now worth $663,765. Waste Management Inc. TRANSACTION: Took initiapl position of 48,100 shares now worth $1.3 million. All stocl valuations based on closing priceMay 22.