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T. Boone Pickens isn't your average hedge fund manager. He's an oilman-turned-fund-manager. Instead of taking risks in the oil fields, he now takes risks in financial markets. His investment strategy is quite straightforward. He forecasts the direction of energy markets and then makes outsized bets in mostly futures and derivatives markets. Depending on his call, he might go long or short. Since he makes directional bets, sometimes his losses are staggering. In 1997 he started a commodities fund, which eventually lost 90 percent in less than 2 years.

The best-performing stocks in the market are usually the highest growing stocks or those with the highest expected growth rates. This doesn’t mean that one should be invested in growth stocks and stay away from value stocks at all times. Historically, value stocks managed to beat the growth stocks hand over fist. The reason is simple: Value stocks are beaten down stocks with very low or negative growth expectations. Not surprisingly, it is easier for these stocks to beat the expectations on the average. On the other hand, everybody is extremely bullish about growth stocks and expect them to have higher growth rates in the future. Their stock prices also reflect this fact. Not surprisingly, it is more difficult for these stocks to beat these challenging expectations.

We ranked Pickens’ stock picks based on their expected five-year growth rates. The data are sourced from Yahoo Finance. Contrarian investors should look into the stocks that top the table.

Company

Ticker

Forward P/E

Expected 5-Year Growth Rate

YTD Return

DAWSON GEOPHYSICAL CO

DWSN

12.23

-2.12

-10.28%

SANDRIDGE ENERGY INC

SD

19.82

1.86

-12.37%

BP PLC

BP

5.69

3.82

-12.62%

NOBLE CORP BAAR

NE

7.78

4.63

-13.43%

OCCIDENTAL PETROLEUM

OXY

9.39

8.31

-16.25%

APACHE CORP

APA

7.11

8.67

-27.87%

EOG RESOURCES INC

EOG

16.94

8.73

-12.82%

WEATHERFORD INTL

WFT

8.72

8.99

-38.96%

MURPHY OIL CORP

MUR

8.1

9.31

-33.09%

CANADIAN NATURAL RESOURCES LTD

CNQ

9.07

9.45

-32.55%

HESS CORP

HES

7.84

9.92

-27.86%

CHESAPEAKE ENERGY CORP

CHK

9.66

11.23

1.29%

NATIONAL OILWELL VARCO

NOV

11.05

12.42

-5.74%

SUNCOR ENERGY INC NEW

SU

8.35

13.69

-27.05%

SCHLUMBERGER LTD

SLB

12.51

16.04

-19.40%

PLAINS EXPLORATION & PROD CO

PXP

8.64

18.78

-21.44%

HALLIBURTON COMPANY

HAL

7.81

19.05

-12.42%

APPROACH RESOURCES INC

AREX

20.56

26.03

-11.19%

Dawson Geophysical Co. is the largest provider of 2-D and 3-D seismic data acquisition services in the U.S. It lost 10.28% since the beginning of this year. It has a market cap of $62.73 billion and a forward P/E ratio of 12.23, and is expected to shrink over the next five years. Pickens had $8.6 million invested in DWSN shares. Ken Griffin also held shares in DWSN.

SandRidge Energy, Inc. is an oil exploration and production company headquartered in Oklahoma City, Okla. It lost 10.28% since the beginning of this year. It has a market cap of $62.73 billion and a forward P/E ratio of 19.82, and is expected to grow at a rate of 1.86% over the next five years. Pickens had $21 million invested in SD shares. George Soros initiated a brand new $15 million position in SD during the second quarter.

BP Plc is a global oil and gas company headquartered in London, United Kingdom. It lost 12.62% since the beginning of this year. It has a market cap of $62.73 billion and a forward P/E ratio of 5.69, and is expected to grow at a rate of 3.82% over the next five years. Pickens had $25.8 million invested in BP shares. Seth Klarman initiated a brand new $244 million position in BP during the second quarter. Bill Miller also had $137 million invested in BP at the end of June (see Bill Miller’s portfolio).

Noble Corporation is a leading offshore drilling contractor for the oil and gas industry. It lost 13.43% since the beginning of this year. It has a market cap of $62.73 billion and a forward P/E ratio of 7.78, and is expected to grow at a rate of 4.63% over the next five years. Pickens had $26.5 million invested in NE shares. Israel Englander initiated a brand new $8 million position in NE shares during the second quarter.

Occidental Petroleum Corporation is a California-based oil and gas exploration and production company with operations in the United States, the Middle East, North Africa, and South America. It lost 16.25% since the beginning of this year. It has a market cap of $62.73 billion and a forward P/E ratio of 9.39, and is expected to grow at a rate of 8.31% over the next five years. Pickens had $12.4 million invested in OXY shares. Ken Fisher held a $519 million position in OXY at the end of June.

Apache Corporation is an American independent oil and gas corporation. It lost 27.87% since the beginning of this year. It has a market cap of $62.73 billion and a forward P/E ratio of 7.11, and is expected to grow at a rate of 8.67% over the next five years. Pickens had $18.4 million invested in APA shares. Jim Simons and D.E Shaw held more than a $40 million position in APA at the end of June.

EOG Resources, Inc. is one of the largest independent (non-integrated) oil and gas companies in the United States. It lost 12.82% since the beginning of this year. It has a market cap of $62.73 billion and a forward P/E ratio of 16.94, and is expected to grow at a rate of 8.73% over the next five years. Pickens had $20.2 million invested in EOG shares. Steven Cohen increased his position in EOG by 69 times during the second quarter and had $19 million invested in EOG at the end of June.

Weatherford International provides oilfield products and services across the drilling, evaluation, completion, production and intervention areas. It lost 38.96% since the beginning of this year. It has a market cap of $62.73 billion and a forward P/E ratio of 8.72, and is expected to grow at a rate of 8.99% over the next five years. Pickens had $20.7 million invested in WFT shares.

Source: Billionaire T. Boone Pickens' Stock Picks With The Most Upside Potential