Hedge Funds Bet More On Energy Stocks In 4Q 2014

A number of hedge funds boosted stakes in Cheniere Energy in the fourth quarter of 2014. Viking Global, managed by Andraes Halvorsen, doubled its stake in Cheniere by adding 4.5 million shares during the period, bringing the position up among its top ten holdings. Other hedge funds who piled up their holdings in the natural gas explorer were Baupost Group, Lone Pine Capital, Steadfast Capital and Blue Ridge Capital.

Baupost grabs more energy stocks

Despite the slump in oil prices, investors continued to bet on energy stocks, especially focusing on natural gas explorers and companies working in the oil and gas service industry. Seth Klarman’s Baupost Group also added to its positions in a number of energy stocks, unfazed by the decline in oil price. Cheniere Energy, which is the fund’s top position according to 13f filings, was increased by 2.6 million shares to 13.8 million shares. The quarterly update only shows a fraction of Baupost Group’s $28.5 billion hedge fund. Other energy companies that the fund bought in the fourth quarter were Antero Rescources, PBF Energy, Bellatrix Exploration, Alon USA Partners and Kosmos Energy.

In the annual letter seen by Bloomberg, Klarman said that they deployed more capital in the oil and gas sector just as the energy decline worsened.

A couple of hedge funds also increased holdings in Anadarko Petroleum, a U.S-based oil and gas explorer. Jonathan Jacobson’s Highfields Capital bought another 3 million shares of Anadarko in the final quarter of 2014, pushing up its total ownership in the company to over 4 million shares. Paul Singer’s Elliott Associates also bought more shares of the company, and now holds 4.6 million shares of Anadarko.

Einhorn buys CONSOL, Loeb snaps up Phillips 66

David Eihorn’s Greenlight Capital bought more shares of CONSOL Energy, which is now among the hedge fund’s top five holdings according to public filings. Greenlight bought 8.3 million shares of the coal and natural gas producer, bringing the total stake up to 13.25 million shares at the end of last year. At the same time, Einhorn exited its holding in BP plc, the British oil major, as it sold two million shares of the company.

Dan Loeb’s Third Point initiated a major new position in Phillips 66 by buying six million shares of the company. Phillips 66 is in the business of providing refining facilities and manufacturing fuels and lubricants.

Jeff Ubben jumps aboard the Halliburton and Baker Hughes merger

Lee Cooperman’s Omega Advisors and Jeff Ubben’s ValueAct were also sizing up energy stocks in the past quarter. Omega bought over two million shares of Laredo Petroleum and less than a million shares of Sanchez Energy, according to filings with the SEC. Ubben, known for his silent activism, bought major stakes in two companies where there is a potential for merger. ValueAct bought nearly 15 million shares of Baker Hughes and 20.8 million shares of Halliburton in the fourth quarter. Shareholders will vote on Baker Hughes and Halliburton merger in March of this year.

Lee Ainslie’s Maverick Capital also bought 2.9 million shares of Halliburton in the past quarter whereas Farallon Capital initiated a position in Baker Hughes with 3.5 million shares.

Discovery Capital and Bruce Berkowitz‘ Fairholme Capital bought new positions in Canadian Natural Resource. Eton Park Capital also established a new position in EQT Corp in the last quarter of 2014.

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