Many leading funds, including Fidelity and Wellington, filed forms 13-D and 13-G (and form 4) with the SEC last week (June 11th to 15th, 2012), indicating that they had amended their ownership in U.S. traded public companies operating in the basic materials and energy sectors. The following summarizes two noteworthy buys and three sells in those sectors. Also, for more info on Forms 13-D and 13-G, and how to interpret them, please refer to our instablog discussion on institutional trades:
Cobalt International Energy (CIE): CIE is engaged in the exploration and production of oil primarily in the deepwater of the U.S. Gulf of Mexico, and in offshore Angola and Gabon in West Africa. On Monday, mega fund Wellington Management, with $254 billion in 13-F assets, filed SEC Form SC 13G/A indicating that it holds 42.4 million or 10.3% of outstanding shares, an increase from the 38.3 million shares that it held at the end of Q1.
CIE shares have recently retreated, off 40% from its highs in February, after a sharp rally from mid-December to mid-February carried shares up four-fold, based on positive major developments in its exploration activities off Angola in West Africa. While part of the pullback would be expected given the steep rally, shares have also retreated based on two other negative developments. First, in mid-April, shares were hit after a piece in the Financial Times alleged that the company could be in violation of U.S. anti-corruption laws regarding its activities in Angola, and later in mid-June, the company provided an update that its Canyon Block 814 wellbore in the Gulf of Mexico would be plugged and abandoned as it did not encounter commercial hydrocarbons.
CIE shares currently trade at 3.5 P/B compared to the average of 1.6 for its peers in the oil & gas exploration & production group, while it is expected to generate higher losses going forward, rising from a 35c loss in 2011 to a 42c loss in 2013.
In addition to CIE, institutions also indicated via their 13D/G filings last week that they accumulated shares in BPZ Resources Inc. (BPZ), engaged in the exploration and production of oil and natural gas primarily in Peru and Ecuador, in which mutual fund powerhouse Fidelity Investments filed SEC Form SC 13G indicating that it holds 12.1 million or 10.4% of outstanding shares, an increase from the 8.7 million shares that it held at the end of Q1.
On top of these, institutional investors also indicated via their 13D/G filings last week that they cut their positions in the following three basic materials and energy sector companies:
- Jaguar Mining Inc. (JAG), that is a Canadian company engaged in the exploration, development and extraction of gold in Minas Gerais, Brazil, in which gold-focused hedge fund BI Partners filed SEC Form SC 13D/A indicating that it holds 7.3 million or 8.6% of outstanding shares, a decrease from the 7.7 million shares that it held at the end of Q1.
- Tesoro Corp. (TSO), engaged in the refining and marketing of petroleum products in the mid-continental and western U.S., in which Fidelity Investments filed SEC Form SC 13G/A indicating that it holds 9.0 million or 6.4% of outstanding shares, a decrease from the 17.4 million shares that it held at the end of Q1.
- Kinder Morgan Inc. (KMI), a provider of energy transportation and storage services in North America, in which Goldman Sachs filed SEC Form 4 indicating that it cut 36.7 million shares from its 134.8 million share position, in connection with the secondary offering of 63 million shares by KMI earlier this month.
Credit: Fundamental data in this article and company descriptions are based on SEC filings, Zacks Investment Research, Yahoo, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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