BP Capital Management’s second quarter SEC filing shows that the hedge fund manager is focusing solely on energy companies these days. While the firm’s founder and Chief Investment Officer T. Boone Pickens has been publically supporting clean energy technologies, his stock portfolio suggests that he is still a strong believer in dirty energy. After selling-out of its basic materials sector holdings, the fund now holds 100% of its portfolio in the energy sector, specifically oil and natural gas companies.
BP Capital’s top holding, offshore oil drilling and exploration company Transocean Inc (RIG), was trimmed over the quarter by 125,000 shares / $9.2mm. Even after the share sales, the company still accounts for 22.6% of the hedge fund’s portfolio, representing $26.7mm or 360,000 shares. The firm’s other top 5 positions included:
Independent oil and gas companies account for 51% of BP Capital’s portfolio. These companies should be the first to rebound (in the form of higher prices) when demand picks up, including the aforementioned Occidental, Devon, and Cabot, as well as:
Besides Transocean, BP Capital also trimmed its exposure to oil and gas equipment services provider Schlumberger Ltd (SLB) by selling 75,000 shares, bringing down its holdings to 100,000 shares or $5.4mm. Of the eight positions BP Capital exited, five were basic materials stocks. The remaining three exited positions included oil and gas equipment manufacturer Halliburton Co (HAL), industrial equipment manufacturer Shaw Group (SGR), and independent oil and gas company McMoran Exploration Co (MMR). Although an obvious departure from the fund’s general sentiment towards independent oil and gas companies over the quarter, BP’s divestment of MMR does not come unwarranted. Over the past year, the stock has fallen from a peak of $34 in August 2008 to a recent low of $8, which has been fueled by unsustainable operating margins within the company.
BP Capital exited the following positions over the second quarter:
As reported in July, T. Boone’s BP Capital Energy Fund II and Energy Equity Fund II posted 79% and 14% returns, respectively, through the first half of 2009.
By Todd WalkerShare on Twitter Share on Facebook