Many leading funds, including Citadel Advisors, Fidelity, BlackRock and D.E. Shaw, filed forms 13-D and 13-G with the SEC over the last month, indicating that they had amended their ownership in U.S. exchange traded basic materials and energy companies. The following summarizes two noteworthy buys and four noteworthy sells in the basic materials & energy sectors (in addition to prior articles summarizing 13D/G activity in the biotech group and the tech sector). 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:
Eldorado Gold Corp. (EGO): EGO is a Canadian company acquiring, exploring and producing gold and mineral properties in Turkey, China, Brazil and Greece. Last week on Tuesday, mutual fund powerhouse Fidelity Investments, with $555 billion in 13-F assets, filed SEC Form SC 13G/A indicating that it holds 58.81 million or 8.3% of outstanding shares, a decrease from the 68.92 million shares that it held at the end of Q1.
In its latest Q1 (March), EGO missed revenue and earnings estimates, reporting $271.5 million and 13c v/s analyst estimates of $330.8 million and 17c. Its shares trade near multi-year lows, cut in half from the highs in September of last year, taking a further dive after news late last week that Greece's Supreme Administrative Court ordered the suspension of all tree-cutting activities in a forest area in Halkidiki owned by a subsidiary of the company.
At current prices in the $10-$11 range, the stock trades at 12-13 forward P/E and 1.3 P/B compared to averages of 10.7 and 2.2 for its peers in the gold mining group, while earnings are projected to grow at a strong 19.6% annual rate from 58c in 2011 to 83c in 2013. Wall Street analysts are bullish on the stock, with sixteen of eighteen analysts that cover it rating it at buy/strong buy, with the remaining two at hold, and they have a price target of $20 on the stock, well above current prices in the $10-$11 range.
In addition to EGO, institutions also indicated via their 13D/G filings in the last month that they decreased their ownership in the following basic materials and energy sector companies:
- Tesoro Corp. (TSO), engaged in the refining and marketing of petroleum products in the mid-continental and western U.S., in which the world's largest and most prominent asset manager, BlackRock Inc., with over $3.5 trillion in assets under management, filed SEC Form SC 13G/A indicating that it holds 6.21 million or 4.4% of outstanding shares, a decrease from the 11.65 million shares it held at the end of Q1.
- Enbridge Energy Partners (EEP), that is a MLP formed to own and operate the U.S. portion of the world's longest liquid petroleum pipeline, which transports crude oil and natural gas liquids primarily from reserves in western Canada to refining centers in the Midwest and Ontario, Canada, in which Quebec City-based public pension fund manager Caisse de depot et placement du Quebec filed SEC Form SC 13G/A indicating that it holds 11.77 million or 4.9% of outstanding shares, a decrease from the 15.02 million shares it held at the end of Q1.
- Rentech Inc. (RTK), that is engaged in the commercialization of its proprietary Rentech-SilvaGas biomass gasification process that converts multiple biomass feedstocks into synthesis gas (syngas) for the production of renewable fuels and power, in which the world's largest and most prominent asset manager, BlackRock Inc., with over $3.5 trillion in assets under management, filed SEC Form SC 13G/A indicating that it holds 11.28 million or 4.9% of outstanding shares, a decrease from the 11.91 million shares that it held at the end of Q1.
On top of these, institutional investors also indicated via their 13D/G filings over the past month that they increased their positions in the following basic materials and energy companies:
- Hercules Offshore (HERO), which provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry worldwide, in which legendary billionaire investor Ken Griffin's Chicago-based hedge fund Citadel Advisers, with $11 billion in assets under management, filed SEC Form SC 13G indicating that it holds 8.05 million or 5.1% of outstanding shares, an increase from the 6.98 million shares that it held at the end of Q1.
- ATP Oil & Gas (ATPG), engaged in oil and natural gas exploration and production in the Gulf of Mexico, the United Kingdom and the Dutch sectors of the North Sea, in which global hedge fund company D.E. Shaw, that uses systematic and computer-driven methods to manage its $26 billion in assets under management, filed SEC Form SC 13G indicating that it holds 2.66 million or 5.1% of outstanding shares, an increase from the 1.75 million shares that it held at the end of Q1.
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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