T. Boone Pickens is the founder of BP Capital Management. The company is a private investment firm focused on investments in energy futures and stocks of public companies in various energy sectors and energy dependent industries.
We believe that by imitating the stock picks of the smartest investors, such as Pickens and corporate insiders, investors are more likely to beat the market. Here are the six stocks Pickens and insiders love.
Chesapeake Energy Corp (CHK): Chesapeake is a producer of natural gas and oil and natural gas liquids in the United States. CHK has a market cap of $20.76B and a P/E ratio of 28.19. Pickens had $30.7 million in CHK at the end of June and the stock gained 6.84% since then. Seven insiders purchased CHK since the beginning of March (check out the list of insiders here).
Sandridge Energy Inc (SD): SandRidge is an independent oil and natural gas company. SD has a market cap of $3.06B and it lost 28.61% vs. -7.99% for the S&P 500 (SPY) since the end of June. Unluckily, Pickens initiated a brand new $20.9 million SD position during the second quarter. Four insiders purchased the stock since March. Wallace Weitz and George Soros are other main holders of SD (check out Soros’ top stock picks).
McMoRan Exploration Co (MMR): McMoRan is engaged in the exploration, development and production of oil and natural gas offshore in the Gulf of Mexico and onshore in the Gulf Coast area of the United States. MMR has a market cap of $1.97B and lost 31.28% since the end of second quarter. Though Pickens had $20.9 million MMR at the end of June, he decreased his position by 3% during the second quarter, which minimized his loss to a certain degree. Two insiders bought the stock since March. Steven Cohen also had $78.8 million MMR at the end of June and he largely increased his position by 239% during the second quarter (check out Cohen’s top stock picks).
Hess Corp (HES): Hess is a global integrated energy company that operates in two segments: exploration and production, and marketing and refining. HES has a market cap of $20.68B and a P/E ratio of 7.40. Pickens initiated a brand new $11.5 million position in HES during the second quarter. HES lost 17.94% since the end of June and two insiders purchased the stock since March. The stock closed at $75 at the end of June. Insider purchases were made when the stock price was $55 and $57 on August 9th and September 12th respectively.
Weatherford Intl (WFT): Weatherford is a provider of equipment and services used in the drilling, evaluation, completion, production and intervention of oil and natural gas wells. WFT has a market cap of $12.25B and a P/E ratio of 70.02. Pickens slightly increased his position in WFT by 1% to $20.7 million during the second quarter. WFT lost 11.63% since the end of June and one insider purchased the stock since March.
Schlumberger Ltd (SLB): Schlumberger is a supplier of technology, integrated project management and information solutions to the international oil and gas exploration and production industry. SLB has a market cap of $98.53B and a P/E ratio of 17.99. Pickens increased his position in SLB by 17% to $11.7 million during the second quarter. SLB lost 13.82% since the end of June and one insider purchased SLB since March. Ken Fisher had more than $700 Million SLB at the end of June.
We like Pickens. Although some of the stocks he invested in did not perform well since June, his experience is invaluable in an energy-focused hedge fund like BP Capital Management. We believe investors can outperform the market over the long-term by focusing on the stock picks of Pickens and the insiders.