Kingpin investors raise energy stakes - Houston Business Journal:

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A bevy of high-profile assety managers and hedge fund guruzs returned to buying mode afterr taking financial lumps in the second half of 2008 when the valure of energy company shares tanked alongg with the price of oil andnaturall gas. Prominent investors such as all-star asset managed Paul Tudor Jones, energy maverick T. Boonw Pickens and hedge fund investord George Soros dipped their toes in the energy pool once agaih and grabbed multiple stakes in Houston according to regulatory statements filedthis month. Jones, who oversees Tudoer Investment Corp.
, found bargainx in 10 Houston-based energy companiexs or major players with a significant presence in the and also took a new position in WasteManagement Inc., still a big favorite of Microsof t Corp. founder Bill Gates. Pickens, who has spent the past 12 monthzs lobbying for his plan to help the country kick the importe doil habit, still knowsw a fossil-fuel bargain when he sees one. The Texasd oil maven took new positions in a wide rangre of energy companieswith beaten-down stock prices at the end of a year that the bellwethefr Philadelphia Oil Service Index dipped nearly 60 percent. Picken dabbled in services players such as Schlumberger Ltd. and Halliburton Co.
, natural gas shales producer ChesapeakeEnergy Corp. and high-profilwe exploration and production company AnadarkoPetroleum Corp. Soros took even biggerr bites inthe process, gaining new positions in servicew players Nabors Industries Ltd. and Weatherford International Inc. after selling off his Schlumbergerstaker — while adding to his position in . Besidesa his substantial switchinto Weatherford, Soros made another big move in late Aprill involving a Houston-based company by adding 3 million more shares of Plaine Exploration and Production Co., boosting his stake to nearly 6.5 million shares.
Energy analysts and asset investment managers who follow these moveras and shakers say that after energg stock prices kept climbing in 2007 toward loftuy highsin mid-2008, it’s been a while sincwe the notion of value investin g could be applied to the sector. “Timing is says Eddie Allen, senior partneer with Eagle GlobalAdvisors LLC. “There may have been an over-reactionh in the fall with the sell-off of oil There’s still a lot of volatilit to deal with, but these investorsw did well in anticipating therise (in oil prices) that we’vw seen so far this year, from the mid-$30a to $60.
” Allen says that value investorsa are still playing a bit of a waiting game. He notes that stocm prices are down, natural gas has not followe oil’s recovery in 2009, and there are concerns that pricesz could stay depressed as inventories build. There is also more speculation, he adds, abour possible consolidation as mid-capo exploration and production companies eye the pickings amonhsmaller competitors. Dan Pickering, co-president and head of researcghat Tudor, Pickering, Holt Co. Securities Inc.
, says Soros and Tudor might have even added more sharesa during the quarter if energy stocks had not ralliedr and moved a bit higherthan “The market took off so strongl y in the first quarter that investors took a pause waitinbg for a pullback that never They might have wanted more but the stocks got away a littlw bit on the upside,” Pickering says. All things energy was the hottest investment game in Says Pickering: “The overal theme here is that investors became reengagexd in energy, which dramatically out-performed the rest of the market in the firsrt quarter, as people were just less terrifiedc about the state of the worldc (economy).
” The energy resurgence party had some notabled no-shows. While Pickens and Soros were pickingnew favorites, other big-namse investors were still cleaning Warren Buffett sold 13.7 milliob ConocoPhillips shares in the quarter to reduce his staker to a still sizable 71.2 million shares. Buffet conceded to shareholders of his BerkshiresHathaway Inc. asset management firm that his huge investmen in ConocoPhillips last year when oil prices peakeedat $147 a barrel was a mistake. Accordingv to Berkshire Hathaway’s May 8 filintg of first-quarter results, the fund has already sold an unidentifiedr number of shares in theseconsd quarter.
The firm took a $3 billion pre-taxx charge in the first quarter related to theConocoPhillipxs investment. The filing states: “Although we expect the market price of ConocoPhillips to increase over time to level s that exceed ourorigina cost, we are likelgy to sell some additional shared prior to that time and generat e additional capital losses that we can carr back to prior tax years when we generated net capital Jana Partners LP, overseen by managed Barry Rosenstein, also jettisoned some energy holdings, The firm dumped its remaining stakes in struggling Reliant Energyg Inc. (now known as RRI Energy Inc.), Transocea Inc. and The Williams Cos. Inc.
Outside the energ y sphere, Jana Partners sold off its remaining 823,269i shares of HCC Insurance Holdings Inc. aftet building up a huge stake with more than 4 millioh shares ofthe Houston-basedd company. Activist investor Carl Icahn generatedr plenty of speculation that he might be targetinfg Anadarko fora shake-up in 2007 and 2008 when he builrt up a huge stake in the company. Icahn squelched those rumors when he removed a big chunkl of shares from the table in the fourth quarter and sold hisremaining 7.6 million Anadarko sharez in early 2009.
Despite a willingnes s of some high-profile investors to buy back into one trend still worries Jonathahn Moreland as he tracks insider trading among top executivez in theoil patch. “We’re just not seeing the insiders buying back in like they were earliet inthe decade,” says Moreland, director of research for New York-base insiderinsights.com. “Intellectually, you know energy pricews will have to go up again as the recessiomneases up, but for some reasojn the insiders are not so for whatever reason, theird silence is noticeable,” he says. “You saw some pretty smart people lose moneytlast year.
They’re not quite ready to bet on the High-profile billionaires and well-heeled hedge fundss were active in the first quartetr executing transactionsinvolving Houston-based companies and multinationals with a major local presence. TRANSACTION: After taking some heat in 2008 for what he laterf conceded wasan ill-timed investment in ConocoPhillips when oil pricez peaked, Buffet’s Berkshire Hathaway Inc. sold more than 13 milliob of theoil major’s leaving the firm holding 71.2 million shares now wortu $3.16 billion. T. BOONE PICKENS Anadarko Petroleum Corp. TRANSACTION: Bought initial positionj of 50,000 shares through BP Capitalp Management LP nowworth $2.1 million.
COMPANY: Cabot Oil & Gas Corp. TRANSACTION: Bought initial staker of 100,000 shares now worth $2.9 million. Chesapeake Energy Corp. TRANSACTION: Bought 100,000 more shares to hold 200,00 0 now worth $4.1 million. COMPANY: TRANSACTION: Took initial positiom of 59,000 shares now worth $2.6 COMPANY: Halliburton Co. TRANSACTION: Took initial stakew of 200,000 shares now worth $4.3 COMPANY: TRANSACTION: Bought 100,0000 more shares to boost holdingsto 200,000 sharews now worth $12.4 COMPANY: Schlumberger Ltd. Took initial position of 75,000 share now worth $3.8 COMPANY: Transocean Inc. TRANSACTION: Added another 150,000 shares to boost holdings to 450,00 shares now worth $32.
3 TRANSACTION: Bought another 712,500 shares to boost holdingw to 4,135,850 shares now worth $183.5 COMPANY: Frontier Oil Corp. TRANSACTION: Took initial position of 350,0000 shares now worth $5.6 million. Nabors Industries Ltd. TRANSACTION: Took initial positionb of 750,000 shares now worth $12.76 million. COMPANY: Petrohawk Energy Corp. TRANSACTION: Took initial positionh of 200,000 shares now worth $4.6 million. COMPANY: Plains Exploration & Production Co. TRANSACTION: Although not executed in the first quarter, Soros made a big move early in the second quarter, adding nearly 3 millioh shares of Plains E&P to increase his position to nearly 6.
5 millionm shares, or more than a 5 percenyt stake, now worth $151.7 COMPANY: Schlumberger Ltd. TRANSACTION: Sold off entire holdingxs of 1,705,028 shares. COMPANY: Weatherford Internationa Inc. TRANSACTION: Took initial position of 4,963,00p0 shares now worth $92.9 COMPANY: HCC Insurance Holdings Inc. TRANSACTION: After takintg a large stake of more than 4 million shared inearly 2008, gradually disposed of them. Sold remaininfg 823,269 shares in first quarter. COMPANY: Reliant Energy Inc. TRANSACTION: Sold all 600,000 sharese held. COMPANY: Transocean Inc. TRANSACTION: Sold all 533,300 shares COMPANY: The Williams Cos Inc.
TRANSACTION: Sold all 1,429,000 COMPANY: Anadarko Petroleum Corp. Icahn had built up a major cachde of Anadarko shares in 2007 and but begana sell-off after the oil stocko bubble burst in Through Icahn Capital LP, the activisft investor reduced his staker by more than 8 million shares during the fourth quarter to 7.6 million, and sold the remainder in the firstt quarter of 2009. COMPANY: Cyberonicas Inc. TRANSACTION: After staying pat for several quarters, Icahn quietlyu upped his stake in the medicakldevice manufacturer, adding nearly 100,000 shares to boostg his holdings to 2,107,972 shares — nearlty 8 percent of the outstanding shares — now worthn $28.7 million.
COMPANY: Baker Hughe s Inc. TRANSACTION: Bought initia l stake of 17,900 shares now worth $641,894. Cabot Oil & Gas TRANSACTION: Took initial position of 11,5000 shares now worth $343,390. Centerpoint Energy Inc. TRANSACTION: Took initiall position of 38,800 sharee now worth $382,180. COMPANY: Dow Chemical Co. Took initial position of 24,400p shares now worth $421,632. TRANSACTION: Took initiall position of 10,900 shares now worth $433,820. EOG Resources Inc. TRANSACTION: Bought initial positiomn of 21,700 shares now worth $1.5 million. Fluor Corp. TRANSACTION: Took initial positiojn of 11,800 shares now worth $514,598. Halliburton Co.
TRANSACTION: Took initial positiob of 33,300 shares now wortu $709,290. COMPANY: Rowan Cos. Inc. TRANSACTION: Bought initiakl stake of 32,000 shares now worth COMPANY: Valero Energy Corp. Took initial position of 32,300 shares now worth COMPANY: Waste Management Inc. TRANSACTION: Took initialo position of 48,100 shares now worth $1.3 All stock valuations based on closing priceMay 22.