BP Capital's 13F (Boone Pickens) ~ market folly

Monday, May 19, 2008

BP Capital's 13F (Boone Pickens)

Before reading this update, make sure you check out the preface to the series I'm doing on Hedge Fund 13F's HERE.

So, first up this week we've got BP Capital. With all the commotion surrounding energy these days, I thought it was only fitting that we begin with an energy focused hedge fund ran by none other than Boone Pickens. If you are unfamiliar with Pickens, he is an energy maverick and his fund returned 300% in 2005. He is a big advocate of Peak Oil Theory and runs an energy-centric hedge fund based in Dallas, Texas. Although he typically holds numerous positions in oil, he is also big on alternative energy (except ethanol) and has numerous holdings there as well. He most recently advocated a large natural gas position and has additionally made a big bet on wind energy. His most recent thoughts can be seen here from my recent post.

Now, let's get down to business. The following is BP Capital's current holdings as of March 31st 2008 as released in their most recent 13F filing with the SEC. I've compared the positions in this most recent 13F to last quarter's 13F and here's what the breakdown looks like:

New Positions:(in no particular order)
Halliburton (HAL) 1,476,346 shares
McMoran Exploration (MMR) 1,017,151 shares
Sandridge Energy (SD) 1,025,621 shares
Transocean (RIG) 1,085, 365 shares
XTO Energy (XTO) 716,762 shares

Added to:
ABB Ltd (ABB) increased position by 2.7% (70,878 more shares)
Clean Energy Fuels (CLNE) increased position by 1% (3946 more shares. Note: This is also Pickens' company)
Dresser Rand (DRC) increased position by 2.7% (24,731 more shares)
Fluor (FLR) increased position by 2.7% (15,980 more shares)
Foster Wheeler (FWLT) increased position by 139% (422,788 more shares)
Greenbrier (GBX) increased position by 2.7% (15,183 more shares)
Interoil (IOC) increased position by 0.8% (7,652 more shares)
Jacobs Engineering (JEC) increased position by 2.7% (23,766 more shares)
KBR (KBR) increased position by 2.7% (16,353 more shares)
Occidental Petroleum (OXY) increased position by 2.7% (52,277 more shares)
Schlumberger (SLB) increased position by 16.6% (164,306 more shares)
Shaw Group (SGR) increased position by 2.7% (17,914 more shares)
Talisman (TLM) increased position by 2.7% (79,210 more shares)
Titanium Metals Corp (TIE) increased position by 2.7% (28,847 more shares)
Weatherford Intl (WFT) increased position by 41% (160,845 more shares)

Reduced Positions:
Chevron (CVX) decreased position by 55% (sold 529,063 shares)
Denbury Resources (DNR) decreased position by 7.2% (sold 238,679 shares)
Suncor (SU) decreased position by 31% (sold 559,812 shares)

Removed Positions:
Positions BP Capital sold out of completely
Anadarko Petroleum (APC)
Exxon Mobil (XOM)
Valero (VLO)

Positions with no change:

Top 10 holdings by % of portfolio:
1. RIG (top holding)
2. OXY
3. SU
4. SLB
5. DNR
6. FLR
7. ABB
8. JEC
9. HAL
10. TLM


Breakdown: So, it appears that Boone Pickens is moving away from the integrated oil plays and into companies that do not have exposure to refining. He's cut his CVX position in half and gotten completely out of XOM and VLO. And, you can't blame him with Oil at current prices... refining margins just flat out suck here. I really like his move (back) into RIG. In his 13F prior to this one, he had sold out of RIG completely and I was very puzzled by that maneuver. But, good to see he's back in the name considering they are seeing very high high day rates. And, in fact, RIG is now BP's largest holding in the portfolio. And, he just picked it all up this past quarter. I wouldn't be too worried about him selling some SU seeing as he's probably just doing some profit taking as well as freeing up cash to put in more natural gas oriented plays. He's stated numerous times that he really likes the Canadian oil sands for their market positioning. He really beefed up his position in FWLT and it looks like he really likes infrastructure plays with his picks of FWLT, JEC, and FLR, with FLR being his top infrastructure holding. I definitely agree on FLR and FWLT, but I'm not entirely sold on JEC yet (time for more research). He also started a position in SD which is interesting because numerous other hedge funds also started a position in SD this past quarter (more on that in the posts to come). But, given his bullish stance on natural gas, this play makes perfect sense. So, there you have it, a glimpse inside Boone Pickens' mind and a peek inside his portfolio.

My personal favorites out of his portfolio: RIG, OXY, SU, FLR, FWLT, XTO
Most interesting move: His addition of SD, considering numerous other hedge funds added it too

Note: Of his positions, I'm long RIG, OXY, SU, FLR, FWLT, SD

Tune in tomorrow when I detail the changes within Lone Pine Capital's portfolio, ran by Steven Mandel (a protege of legendary investor Julian Robertson).


Mark said...

Congrats on the blog. :)

Now you will see how much work it is to put up 6-7 postings a day ;)

madhatter said...

thanks Mark. I doubt I'll be posting as frequently as you do. Like you said in one of your posts, its like a second job haha.

trololol said...

Hm.. all the stocks you recommend (in the final line) are at or near their 52-week highs. I suppose you wouldn't recommend buying them now would you?

madhatter said...

elem3nt, all the above names I recommended are indeed trading high due to oil's run. These are all names I like over a long term timeframe though. So, what I would suggest is that you maybe take 1/4th of your position right now just to start it off. Or, you could wait for a pullback in oil (hah, at this rate though, who knows when that will happen!). Then, if you just add some limit orders down around where the 20 day moving average and 50 day moving averages are, you can just set those orders and forget about them until you receive notification that they hit.

Again, just remember these are all long term investments, so you want to slowly ease into those positions over time. Ideally, waiting for a pullback is best. But, you can always get a piece of the action now with all intentions of averaging down if/when the pullback comes.