By: Joshua Reider
Steve Cohen, as the manager of mega-fund SAC Capital, has recently increased his stock holdings in several different energy companies according to the firm's most recent 13F filing. Cohen has invested in energy companies with presences in North America and abroad. With the recent, yet dramatic growth in U.S. oil and gas production, individual investors may wish to gain exposure to this sector. Here's how Cohen is doing it (check out SAC Capital's newest stock picks).
Anadarko Petroleum Corporation (APC) is an independent oil and gas exploration and production company. SAC Capital increased its position in Anadarko by 27% at the end of the most recent 13F-filing period. Anadarko currently has projects in the Rocky Mountains region, the southern United States and the Appalachian basin; international production and exploration activities are located in Africa, China, and New Zealand.
Anadarko recently made a large natural gas discovery off the coast of Mozambique, and is planning a liquid natural gas project in the area. Anadarko reported increased sales volumes in the 3rd quarter of 2012 by 79,000 BOE per day over the 3rd quarter of 2011, which was a 12% increase. Anadarko had 3rd quarter 2012 income of $121 million, or $0.24 per share. The company sports a P/E ratio of 22.27. Its share price hit a 12-month low of $56.42 on June 4, 2012, but has since bounced back to a recent price around $80 per share, an increase of over 41%.
Marathon Oil Corporation (MRO) is another company in which SAC Capital grew its position according to its most recent 13F filing, with a 197% increase. Marathon currently has a market cap of $24.17 billion along with an attractive dividend yield of 1.99%. Marathon reported net income of $450 million for the 3rd quarter of 2012, which was an increase of 11% over the 3rd quarter of 2011. Marathon predicted increases in production of 3% in oil and 1% in natural gas for the 4th quarter of 2012. Marathon's share price has gone up over 26% in the last six months.
SAC Capital is not the only hedge fund to increase its bet on Marathon, with Louis Bacon's Moore Global Investments increasing its stake by 108% in its latest 13F filing (check out Louis Bacon's other energy sector picks).
SAC Capital made a modest increase of 3% in its position in Schlumberger Ltd. (SLB). Schlumberger is an oilfield services company that provides technology, project management and information solutions for the oil and gas industry. Schlumberger's recently-reported 4th quarter earnings for 2012 showed a revenue increase of 8.5% to $11.17 billion, versus $10.16 billion for the 3rd quarter of 2012. However, profits from continuing operations were reported at $1.44 billion, which was down 3% year over year. Still, Schlumberger is increasing its exploration and production activity outside of North America, with significant revenue increases expected in projects in Europe and the Middle East.
What about Cohen's other energy picks, which include a mid-cap company?
Suncor Energy Inc. (SU) is an integrated energy company engaged in oil sands development, conventional and offshore oil and gas production and petroleum refining activities. SAC Capital dramatically increased its holdings in Suncor by over 900% from the 2nd to 3rd quarter of 2012, and is currently holding more than 5 million shares according to its most recent 13F filing. As a company, Suncor appears to be headed in the right direction; it reported strong revenue for the 3rd quarter of 2012 quarter with net income of $1.55 billion, compared with $1.287 billion for the 3rd quarter of 2011. Suncor currently has a dividend yield of 1.51%, and increased its quarterly dividend by 18% last year.
On the flip side, Suncor reported total average production of 535.3 thousand barrels of oil equivalents in the 3rd quarter, which was down from the 542.4 thousand it reported one quarter earlier. Suncor merged with Petro-Canada in 2009, which was Canada's 2nd largest refiner. With the merger, Suncor now has significant refining operations in Canada, as well as in Commerce City, Colorado. Additionally, Suncor has a 22.7% working interest in the Hebron Field project off the coast of Newfoundland. That project is expected to produce an estimated 700 million barrels of oil. Suncor's share price has increased over 12% in the past six months, but has recently hovered in the $34.50 to $35.50 range since the first of the year.
Cohen also recently purchased a large amount of additional shares in Superior Energy Services, Inc. (SPN). Superior is a mid-cap play with a market capitalization of $3.91 billion. Superior manufactures, rents and sells oilfield equipment, along with oilfield services, to oil and gas companies. SAC Capital increased its holdings from slightly over 1 million shares in the 2nd quarter of 2012, to over 6 million shares in the 3rd quarter of 2012, an increase of 485%.
Superior's stock has had a good run recently, with its share price up nearly 15% since the first of the year. Cohen clearly believes in the future of Superior with his increased investment in the company, and it may provide the individual investor a significant opportunity for growth in their portfolio, especially since it is a smaller-cap company compared with Cohen's other energy holdings (learn more about how hedge funds small-cap investments can beat the market).