T. Boone Pickens' 6 Favorite Fundamentally Strong Energy Stocks

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Includes: BP, DVN, HAL, OXY, SU, XOM
by: Dividendinvestr

T. Boone Pickens is the founder and chairman of the hedge fund BP Capital Management. T. Boone Pickens invests 90 percent in oil and gas equities and 10 percent in commodities. Pickens has an estimated current net worth of about $1.45 billion. Pickens has worked nearly 40 years in Mesa Petroleum, which he founded in 1956.

Pickens initiated new positions in Devon Energy (NYSE:DVN) and Exxon Mobil (NYSE:XOM) during the third quarter of 2011. He sold out his Noble corp (NYSE:NE), Plains Exploration & Production (NYSE:PXP) and Apache Corp. (NYSE:APA) shares in the same quarter. Below we compiled a list of T. Boone Pickens' picks with strong fundamentals at BP Capital's most recent 13F filing. All stocks in this list have P/E ratio of below 15 and Total Debt/Equity ratio of lower than 0.5. We obtained market data from Finviz and hedge fund holdings from Insider Monkey.

1. BP Plc (NYSE:BP): BP provides fuel, retail services and petrochemicals products. Shares of BP recently traded at $44.08 with a trailing price to earnings of 6.04 and a forward price to earnings of 6.76. BP has a 3.81% dividend yield and lost 0.97% during the past 12 months. The stock has a market cap of $139.4 billion and total debt/equity ratio of 0.41. BP has an estimated growth rate of -3.41% for this year and 4.23% for next five years. Pickens had $15 million invested in BP shares. Seth Klarman held the largest position in BP with his $496 million investment at the end of September. Seth Klarman increased his BP holdings by 150% during the third quarter of 2011. Christian Leone's Luxor Capital Group and Eric Mindich's Eton Park Capital also had more than $200 million invested in BP at the end of September. Jonathon Jacobson initiated a $370 million position, including $187 million worth of call options, in BP during the third quarter of 2011.

2. Devon Energy Corp: Devon Energy Corporation provides exploration, development and production of natural gas and oil in the United States and Canada. Shares of Devon recently traded at $64.75 with a trailing price to earnings of 13.11 and a forward price to earnings of 9.43. DVN has a 1.05% dividend yield and lost 16.45% during the past 12 months. The stock has a market cap of $26.2 billion and total debt/equity ratio of 0.44. Devon has an estimated growth rate of 13.55% for this year and 8.1% for next five years. Pickens initiated an $8 million brand new position in Devon shares during the third quarter of 2011. Ric Dillon's Diamond Hill Capital holds the largest position in DVN with its $95 million investment.

3. Exxon Mobil Corp: Exxon Mobil is the one of the leading integrated energy companies operating worldwide. Shares of XOM recently traded at $85.12 with a trailing price to earnings of 10.26 and a forward price to earnings of 10.19. XOM has a 2.21% dividend yield and gained 15.9% during the past 12 months. The stock has a market cap of $408 billion and total debt/equity ratio of 0.11. XOM has an estimated growth rate of -2.57% for this year and 8.2% for next five years. Pickens initiated a $7 million brand new position in XOM during the third quarter of 2011. Ken Fisher's Fisher Asset Management held the largest position in XOM with its $519 million investment at the end of September.

4. Suncor Energy Inc New (NYSE:SU): Suncor Energy Inc. is a Canadian integrated energy company based in Calgary, Alberta. It specializes in production of synthetic crude from oil sands. Shares of SU recently traded at $30.71 with a trailing price to earnings of 12.14 and a forward price to earnings of 9.42. SU has a 1.39% dividend yield and lost 16.5% during the past 12 months. The stock has a market cap of $48.3 billion and total debt/equity ratio of 0.29. SU has an estimated growth rate of -1.8% for this year and 12.66% for next five years. Pickens had $5 million invested in SU shares. Steven Cohen and Ken Griffin both increased their positions in SU by more than 35% during the third quarter of 2011.

5. Occidental Petroleum Corp (NYSE:OXY): Occidental Petroleum Corporation provides oil and gas exploration and production primarily in the United States. Shares of OXY recently traded at $95.77 with a trailing price to earnings of 12.52 and a forward price to earnings of 11.19. OXY has a 1.92% dividend yield and gained 1.23% during the past 12 months. The stock has a market cap of $77.7 billion and total debt/equity ratio of 0.16. OXY has an estimated growth rate of 3.26% for this year and 14.83% for next five years. Pickens had $4 million invested in OXY shares. Ralph V. Whitworth's Relational Investors and Ken Fisher's Fisher Asset Management both held more than $350 million positions in OXY at the end of September. D. E. Shaw purchased nearly $79 million worth of OXY shares during the third quarter of 2011.

6. Halliburton Company (NYSE:HAL): Halliburton Company provides various products and services to the energy industry worldwide. Shares of HAL recently traded at $34.98 with a trailing price to earnings of 11.82 and a forward price to earnings of 8.43. HAL has a 1.03% dividend yield and lost 7.7% during the past 12 months. The stock has a market cap of $32.2 billion and total debt/equity ratio of 0.31. HAL has an estimated growth rate of 24.25% for this year and 27.64% for next five years. Pickens had $4 million invested in HAL shares. Jim Simons also initiated a $94 million brand new position in HAL during the third quarter.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.