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By Darnell Brown

The price of oil is on the rise, and is now around $100 per barrel. With oil prices on the rise, I thought it would be interesting to review some of the recent stock picks of famed oil man T. Boone Pickens. This article will analyze five stocks that Mr. Pickens' Hedge Fund, BP Capital Management, has recently traded.

Devon Energy Corporation (NYSE:DVN) DVN has a market cap of $25.8 billion with a price to energy ratio of 5.67. The stock has traded in a 52 week range between $50.74 and $93.56. The stock is currently trading around $64. The company reported third quarter revenues of $3.5 billion compared to revenues of $3.2 billion in the second quarter of 2011. Third quarter operating income was $1.6 billion, compared to operating income of $1.4 billion in the second quarter of 2011.

One of DVN’s competitors is EOG Resources Inc. (NYSE:EOG). EOG is currently trading around $97 with a market cap of $26.08 billion and a price to earnings ratio of 24.88. EOG pays a dividend which yields 0.6% versus DVN, whose dividend yields 1%.

BP Capital currently owns 140,006 shares of DVN. BP Capital purchased all 140,006 shares of DVN in the third quarter of 2011. DVN is a natural gas and oil exploration and production company. In the third quarter, the company grew revenues by 9% and net operating income by 443%. The stock's price performance has been poor. The stock is down by 12.6% over the last 52 weeks but is up by 7% over the last month. I believe that T. Boone Pickens was attracted to DVN because it is cheaper than its competitors (price to earnings ratio 5.67/price to book ratio 1.28). DVN should benefit from the rising price of oil, and I rate it as a buy.

Exxon Mobil Corporation (NYSE:XOM) XOM has a market cap of $373.2 billion with a price to energy ratio of 9.4. The stock has traded in a 52 week range between $67.03 and $88.23. The stock is currently trading around $78. The company reported third quarter revenues of $125 billion compared to revenues of $85 billion in the third quarter of 2010. Third quarter net income was $10.3 billion, compared to net income of $7.3 billion in the third quarter of 2010.

One of XOM’s competitors is BP Plc. (NYSE:BP). BP is currently trading around $43 with a market cap of $134.7 billion and a price to earnings ratio of 5.9. BP pays a dividend which yields 3.8% versus XOM, whose dividend yields 2.4%.

BP Capital currently owns 94,310 shares of XOM. BP Capital purchased all 94,310 shares of XOM in the third quarter of 2011. XOM is the largest energy company in the world. The company has provided investors with strong earnings and a solid dividend income for more than a decade. In 2010, the company increased revenues by 23% and net income by 58%. The stock has performed relatively well and is up by 10.4% over the last 52 weeks. The company dividend paying history has been outstanding. The company has paid quarterly dividends since 1970 and has increased its dividend five times by 46.8% over the last five years. XOM offers investors capital appreciation and a growing dividend. XOM should be a part of any value investor’s portfolio, and I rate the stock as a buy.

Gastar Exploration Ltd. (NYSEMKT:GST) GST has a market cap of $211.21 million with a negative price to earnings ratio. The stock has traded in a 52 week range between $2.35 and $5.44. The stock is currently trading around $3.34. The company reported third quarter revenues of $12 million and net income of $1 million.

One of GST’s competitors is Miller Energy Resources Inc. (NYSE:MILL). MILL is currently trading around $2.70 with a market cap of 170.8 million and a negative price to earnings ratio. Neither GST nor MILL pays a dividend.

BP Capital currently owns 1,298,565 shares of GST. BP Capital’s last GST transaction was for the purchase of 59,365 shares in the third quarter of 2011. GST is a highly risky natural gas play. The company has lost money in three out of the last four years. In 2010, the company reported net income of $-12.8 million. GST’s stock price is down by 28% over the last 52 weeks. GST is not an investment for the risk adverse. Investors that are looking to hit a home run and are willing to take a risk might consider this stock. However, investors that consider themselves to be value oriented should leave this stock alone.

Schlumberger Limited (NYSE:SLB) SLB has a market cap of $96.24 billion with a price to earnings ratio of 21.20. The stock has traded in a 52 week range between $54.79 and $95.64. The stock is currently trading around $72. The company reported third quarter revenues of $10.2 billion compared to revenues of $6.8 billion in the third quarter of 2010. Third quarter net income was $1.3 billion compared to net income of $1.7 billion in the third quarter of 2010.

One of SLB’s competitors is Baker Hughes Inc. (NYSE:BHI). BHI is currently trading around $56 with a market cap of $24.29 billion and a price to earnings ratio of 13.82. BHI pays a dividend which yields 1% versus SLB, whose dividend yields 1.3%.

BP Capital currently owns 50,913 shares of BHI. BP Capital purchased 135,822 shares of SLB in the second quarter of 2011 and then sold 84,909 shares of SLB in the third quarter of 2011. In 2010, SLB reported net income of $4.26 billion, which was a 36% increase from 2009. The company increased year-over-year third quarter revenues by 50%, but its net income declined by 30%. SLB reported $3.58 billion in net income through the first three quarters of 2011 and is on track to surpass its 2010 earnings. SLB stock has performed poorly and is down by 6% over the last 52 weeks. SLB is a very solid company and should benefit from rising oil prices, however there are other oil service companies such as SeaDrill Limited (NYSE:SDRL) or Ensco Plc (NYSE:ESV) that I would prefer to invest in. I rate SLB as a hold.

Hess Corporation (NYSE:HES) HES has a market cap of $20.54 billion with a price to earnings ratio of 10.76. The stock has traded in a 52 week range between $46.66 and $87.40. The stock is currently trading around $60. The company reported third quarter revenues of $8.7 billion compared to revenues of 7.9 billion in the third quarter of 2010. Third quarter net income was $298 million compared to net income of 1.1 billion in the third quarter of 2010.

One of HES’s competitors is ConocoPhillips (NYSE:COP). COP is currently trading around $70 with a market cap of $92.36 billion and a price to earnings ratio of 8.92. COP pays a dividend which yields 3.8% versus HES, whose dividend yields 0.6%.

BP Capital currently owns zero shares of HES. BP Capital purchased 154,254 shares of SLB in the second quarter of 2011 and then sold all 154,254 shares of HES in the third quarter of 2011. HES is an international integrated oil company. The company has seen its revenues decline in each of the last two quarters. HES’s Year-over-year third quarter net income declined by $802 million. HES missed its third quarter earnings per share projections by $0.29 per share. As a result of the disappointing earnings results, the stock price has suffered and is down by 14.25% over the last 52 weeks. HES is in a downward trend and I rate the stock as a hold.

Source: 5 New Big Buys From Billionaire T. Boone Pickens