T. Boone Pickens And Andrew Hall Are Bullish About These Energy Stocks

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 |  Includes: BP, CHK, CNQ, COP, DVN, EOG, HAL, NOV, SLB, SU, XOM
by: Insider Monkey

T. Boone Pickens had decades of experience before he founded BP Capital Management, a hedge fund focusing on investments in energy futures and stocks of companies in energy sectors and energy dependent industries. BP Capital returned an average of 38% per year between August 2011 and mid-2007.

Like BP Capital, Andrew Hall’s Astenbeck Capital Management is also a hedge fund specializing in the energy sector. Hall used to be a star trader at Phibro Llc, an international commodities trading firm that trades in oil, natural gas and other commodity markets. Hall launched Astenbeck Capital in February 2010 with Occidental Petroleum Corporation. Eighty percent of the fund is currently owned by Andrew Hall, and the rest 20% is owned by Occidental Petroleum.

The experience of Pickens and Hall accumulated in the energy industry before founding their own hedge funds is invaluable to their energy focused funds. They understand the energy industry much better than other people. Therefore, we believe that by focusing on the common stock picks of these two hedge fund managers, investors may gather some intelligence about undervalued stocks in the energy sector. Below we compiled a list of stocks that were owned by both funds at the end of September.

Company Name

Ticker

Pickens

Hall

CHESAPEAKE ENERGY

CHK

14565

7392

BP PLC

BP

14504

20880

NATIONAL OILWELL VARCO

NOV

9192

18028

DEVON ENERGY CORP

DVN

7762

7952

EOG RESOURCES INC

EOG

7560

10002

EXXON MOBIL CORP

XOM

6850

7072

SUNCOR ENERGY INC

SU

5495

5995

CANADIAN NATURAL RES

CNQ

5452

3944

HALLIBURTON

HAL

3861

18889

SCHLUMBERGER

SLB

3041

24675

Click to enlarge

Chesapeake Energy Corp (NYSE:CHK) is the largest position in Pickens’ BP Capital at the end of September. Pickens invested $14.6 million in CHK. Hall’s Astenbeck was also bullish about this company. It had $7.4 million invested in this stock. CHK has a market cap of $16.92B, a P/E ratio of 13.79, and lost 0.43% since the end of September.

Among the stocks both Pickens and Hall are bullish about, Schlumberger Ltd (NYSE:SLB) is the biggest position held by Hall’s Astenbeck Capital. At the end of September, Astenbeck invested $24.7 million in SLB, and Pickens also had $3.0 million invested in this stock. Since the end of September, SLB returned 26.05%, outperforming the SPY by more than 15 percentage points. Ken Fisher is also bullish about SLB. His Fisher Asset Management invested $487 million in this stock.

BP Plc (NYSE:BP) is another stock both Pickens and Hall are bullish about. Pickens invested $14.5 million in BP and Hall initiated a brand new $20.9 million of BP during the third quarter. The international oil and gas company has a market cap of $138.75B and a P/E ratio of 6.02. The stock gained 21.19% so far in the fourth quarter, versus 10.35% for SPY.

Over the third quarter, Pickens initiated a brand new $7.8 million of Devon Energy Corp (NYSE:DVN). Hall also invested $8.0 million in DVN. DVN returned 17.95% since the end of the third quarter, beating the market by more than 7 percentage points.

Other stocks both hedge fund managers are bullish about include National Oilwell Varco Inc (NYSE:NOV), EOG Resources Inc (NYSE:EOG), Exxon Mobil Corp (NYSE:XOM), Suncor Energy Inc (NYSE:SU), Canadian Natural Resources (NYSE:CNQ), and Halliburton Company (NYSE:HAL). We like energy stocks because we still believe that a bull market in energy stocks is still intact. Oil supply hasn’t increased over the past few years but demand from emerging markets has been increasing steadily. That’s why we have ConocoPhillips (NYSE:COP) and CHK in our portfolio, and we plan to add one more stock.

Disclosure: I am long CHK, COP.