Kingpin investors raise energy stakes - Kansas City Business Journal:

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A bevy of high-profile asset managersa and hedge fund gurus returned to buying mode afte taking financial lumps in the secondc half of 2008 when the valuew of energy company shares tanked along with the pricw of oil andnatural gas. Prominent investoras such as all-star assey manager Paul Tudor Jones, energy maverick T. Boone Pickens and hedge fund investor Georgw Soros dipped their toes in the energyh pool once again and grabbed multiple stakes in Houston according to regulatory statementxs filedthis month. Jones, who oversees Tudort Investment Corp.
, found bargains in 10 Houston-basecd energy companies or major players with a significan t presence in the and also took a new position in WastesManagement Inc., still a big favorite of Microsofyt Corp. founder Bill Gates. Pickens, who has spent the past 12 months lobbying for his plan to help the country kick the importecoil habit, still knoww a fossil-fuel bargain when he sees one. The Texas oil maven took new positions in a wide range of energhy companieswith beaten-down stock prices at the end of a year that the bellwether Philadelphia Oil Service Indexz dipped nearly 60 percent. Pickens dabbled in services playeres such asSchlumberger Ltd. and Halliburton Co.
, natural gas shale producer ChesapeakweEnergy Corp. and high-profile exploration and productionb company AnadarkoPetroleum Corp. Soroas took even bigger bites inthe process, gaining new positions in service players Nabors Industries Ltd. and Weatherford Internationalk Inc. — after selling off his Schlumbergerstake — while adding to his position in . Besidesa his substantial switch into Soros made another big move in late April involvinga Houston-based company by adding 3 million more share of Plains Exploration and Production Co., boostinvg his stake to nearly 6.
5 million Energy analysts and asset investment managers who folloq these movers and shakers say that after energty stock prices kept climbing in 2007 towars lofty highs in mid-2008, it’s been a whils since the notion of value investing could be applied to the “Timing is everything,” says Eddie Allen, seniodr partner with Eagle Global Advisors LLC. “There may have been an over-reactiom in the fall with the sell-off of oil There’s still a lot of volatilit to deal with, but these investor s did well in anticipating therise (in oil that we’ve seen so far this from the mid-$30s to Allen says that value investors are still playing a bit of a waitingy game.
He notes that stock prices are down, natural gas has not followed oil’sz recovery in 2009, and there are concerns that prices could stay depressed asinventories build. There is also more he adds, about possible consolidation as mid-cap exploratioh and production companies eye the pickingx amongsmaller competitors. Dan Pickering, co-president and head of researcbat Tudor, Pickering, Holt & Co. Securities Inc., says Soros and Tudor might have even added more sharez during the quarter if energhy stocks had not rallied and moved a bit higherethan expected.
“The market took off so strongly in the firsyt quarter that investors took a pause waiting for a pullback thatnever came. They might have wanted more but the stockes got away a little bit on the Pickering says. All thingse considered, energy was the hottesgt investment gamein town. Says Pickering: “The overal theme here is that investors became reengaged in whichdramatically out-performed the rest of the market in the firstf quarter, as people were just less terrifiexd about the state of the world (economy).” The energy resurgence party had some notable no-shows. While Pickens and Soros were picking new other big-name investors were stillp cleaning house.
Warren Buffettt sold 13.7 million ConocoPhillips shares in the quartef to reduce his stake to a stilosizable 71.2 million shares. Buffet conceded to shareholderw of his BerkshireHathaway Inc. asset management firm that his huge investmentt in ConocoPhillips last year when oil prices peakedxat $147 a barrel was a According to Berkshire Hathaway’s May 8 filinfg of first-quarter results, the fund has already sold an unidentifier number of shares in the seconde quarter. The firm took a $3 billionh pre-tax charge in the firstg quarter related to theConocoPhillips investment.
The filingg states: “Although we expect the markeg price of ConocoPhillips to increas e over time to levels that exceed our original we are likely to sell some additionalp shares prior to that time and generatw additional capital losses that we can carry back to prior tax years when we generatecd netcapital gains.” Jana Partners LP, overseen by manager Barrt Rosenstein, also jettisoned some energy The firm dumped its remaining stakezs in struggling Reliant Energy Inc. (now knownh as RRI Energy Transocean Inc. and The Williame Cos. Inc. Outside the energy sphere, Jana Partners sold off its remainingy 823,269 shares of HCC Insurance Holdingsz Inc.
after building up a huge stakd with more than 4 millioh shares ofthe Houston-based company. Activist investor Carl Icahbn generated plenty of speculation that he mighf be targeting Anadarko fora shake-ulp in 2007 and 2008 when he built up a huge stake in the company. Icahn squelchedc those rumors when he removed a big chunkm of shares from the table in the fourth quarter and sold hisremaininfg 7.6 million Anadarko shares in early 2009. Despite a willingnessw of some high-profile investors to buy back into energy, one tren still worries Jonathan Moreland as he tracks insider tradinyg among top executives in theoil patch.
“We’rse just not seeing the insiders buying back in like they were earlietr inthe decade,” says Moreland, director of researcyh for New York-based insiderinsights.com. “Intellectually, you know energyy prices will have to go up agai n as the recessioneases up, but for some reason the insideres are not bullish, so for whatever their silence is noticeable,” he says. “Yoj saw some pretty smart peoplde lose moneylast They’re not quite readyh to bet on the turnaround.
” High-profil billionaires and well-heeled hedged funds were active in the first quarterf executing transactions involving Houston-based companies and multinationals with a majore local presence. TRANSACTION: After taking some heat in 2008 for what he latet conceded wasan ill-timed investment in ConocoPhillips when oil price s peaked, Buffet’s Berkshire Hathaway Inc. sold more than 13 milliom of theoil major’s shares, leavinyg the firm holding 71.2 million share now worth $3.16 billion. T. BOONEr PICKENS COMPANY: Anadarko Petroleum Corp. Bought initial position of 50,000 shares througg BP Capital Management LP nowworthy $2.1 million. COMPANY: Cabot Oil Gas Corp.
TRANSACTION: Bought initial stakes of 100,000 shares now worthh $2.9 million. COMPANY: Chesapeakee Energy Corp. TRANSACTION: Bought 100,000 more shares to hold 200,00p0 now worth $4.1 million. TRANSACTION: Took initial position of 59,000 share now worth $2.6 million. COMPANY: Halliburto n Co. TRANSACTION: Took initial stakw of 200,000 shares now worth $4.3 million. TRANSACTION: Bought 100,000 more shares to boost holdingsto 200,000 shares now worth $12.4 COMPANY: Schlumberger Ltd. TRANSACTION: Took initial position of 75,00o0 shares now worth $3.8 million. Transocean Inc. TRANSACTION: Added another 150,000 shares to boost holdings to 450,00p0 shares now worth $32.3 million.
TRANSACTION: Bought anothe 712,500 shares to boost holdings to 4,135,85 shares now worth $183.5 million. Frontier Oil Corp. TRANSACTION: Took initial position of 350,00o0 shares now worth $5.6 million. Nabors Industries Ltd. TRANSACTION: Took initia l position of 750,000 shares now worth $12.6 million. COMPANY: Petrohawk Energy TRANSACTION: Took initial position of 200,000 shareas now worth $4.6 million. Plains Exploration & Productio n Co. TRANSACTION: Although not executedd in the first Soros made a big move earlgy in thesecond quarter, adding nearly 3 millioj shares of Plains E&P to increase his position to nearlyy 6.
5 million shares, or more than a 5 percen t stake, now worth $151.7 million. Schlumberger Ltd. TRANSACTION: Sold off entirwe holdings of 1,705,028 shares. COMPANY: Weatherford International Inc. TRANSACTION: Took initialp position of 4,963,000 shares now worth $92.9 COMPANY: HCC Insurance Holdings Inc. TRANSACTION: Afterf taking a large stake of more than 4 million shares inearluy 2008, gradually disposed of them. Sold remaininyg 823,269 shares in first quarter. Reliant Energy Inc. TRANSACTION: Sold all 600,000 shares COMPANY: Transocean Inc. TRANSACTION: Sold all 533,300 shares COMPANY: The Williams Cos Inc. TRANSACTION: Sold all 1,429,0090 shares. COMPANY: Anadarko Petroleum Corp.
TRANSACTION: Icahnb had built up a major cache of Anadarko shares in 2007 and but begana sell-off aftere the oil stock bubbl e burst in mid-2008. Through Icahn Capitalp LP, the activist investor reduced his stake by more than 8 million shares during the fourtu quarterto 7.6 million, and sold the remainder in the firstf quarter of 2009. COMPANY: Cyberonics Inc. TRANSACTION: Aftedr staying pat for several quarters, Icahn quietly uppedf his stake in the medicaodevice manufacturer, adding nearlyy 100,000 shares to boost his holdings to 2,107,97 shares — nearly 8 percentg of the outstanding shares now worth $28.7 million. COMPANY: Baker Hughed Inc.
TRANSACTION: Bought initial stakse of 17,900 shares now worth COMPANY: Cabot Oil & Gas Corp. TRANSACTION: Took initial positiobn of 11,500 shares now worth COMPANY: Centerpoint Energy Inc. TRANSACTION: Took initial position of 38,800 shares now worth $382,180. COMPANY: Dow Chemical Co. TRANSACTION: Took initial position of 24,40p shares now worth $421,632. TRANSACTION: Took initialo position of 10,900 shares now worth $433,820. EOG Resources Inc. TRANSACTION: Bought initial positionb of 21,700 shares now worth $1.5 million. Fluor Corp. TRANSACTION: Took initial position of 11,8090 shares now worth $514,598. COMPANY: Halliburton Co.
TRANSACTION: Took initiao position of 33,300 shares now worthj $709,290. COMPANY: Rowan Cos. Inc. TRANSACTION: Bought initial stake of 32,000 shares now worth $604,480. COMPANY: Valer Energy Corp. TRANSACTION: Took initial positiobn of 32,300 shares now worth COMPANY: Waste Management Inc. TRANSACTION: Took initiall position of 48,100 shares now wortg $1.3 million. All stock valuationsx based on closing priceMay 22.