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 Hedge funds such as David Tepper's Appaloosa Management and Daniel
Loeb's Third Point showed bullish moves toward the sector, while
Warren Buffett's Berkshire Hathaway also appeared sanguine on the
sector by maintaining a big stake in U.S. pipeline operator Kinder
Morgan, U.S. Securities and Exchange Commission filings showed
Friday and Monday.
Barry Rosenstein's Jana Partners, George Soros' Soros Fund
Management and Leon Cooperman's Omega Advisors sold several stakes
in energy companies.
Third Point took stakes in natural gas companies Targa Resources
Corp and Williams Companies Inc of 1.8 million shares and 2 million
shares, respectively, while selling a stake in Clayton Williams
Energy Inc of 400,000 shares. Williams said last week that it had
filed a lawsuit against Energy Transfer Equity LP to prevent it from
terminating its once-coveted deal for Williams.
Targa Resources rose 10.3 percent in the first quarter, but Williams
fell 37.5 percent, and Clayton Williams shares lost 70 percent of
their value.
Appaloosa increased its stake in Williams Partners LP, a natural gas
infrastructure master limited partnership (MLP) by 10.9 million
units to 13.2 million units. The fund also increased its stake in
Energy Transfer Partners LP by 11 million units to 16.2 million
units.
Appaloosa was less optimistic on Kinder Morgan and cut its stake by
4.9 million shares to 4.5 million shares, however, diverging from
Berkshire's unchanged position of 26.5 million shares. Berkshire's
bullish bias was likely profitable in the quarter, with shares up
nearly 20 percent.
These hedge-fund SEC disclosures are backward-looking and come out
45 days after the end of each quarter. Still, the filings offer a
glimpse into what hedge fund managers saw as investment
opportunities.
The first quarter was a rollercoaster for U.S. crude prices, which
sank to a nearly 13-year low of $26.05 a barrel on Feb. 11 before
recovering all those losses and ending the quarter 3.5 percent
higher, at $38.34 a barrel.
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That multi-year low in U.S. crude prices, which marked a more than
75 percent decline from highs hit in mid-2014, was touched after
data showing strong growth in U.S. and global oil inventories, and
U.S. investment bank Goldman Sachs called for depressed prices until
the second half of the year.
The sharp rebound in prices was powered by major producers’ plans to freeze
output, declining U.S. oil output and strong gasoline demand.
BEARISH TILTS
Jana Partners sold its entire stake in Williams of 3.8 million shares, opposing
Third Point's new bet on the natural gas company. Williams shares stumbled as
U.S. natural gas futures fell more than 16 percent in the first quarter to
$1.959 per million British thermal units.
Omega Advisors sold its entire stake in Anadarko Petroleum Corp of 272,000
shares, while trimming its position in Gulfport Energy Corp by 362,000 shares to
209,000 shares. Omega also sold its entire stake in Atlas Energy Group of 3.9
million shares.
Soros Fund Management sold entire stakes in Valero Energy Corp, Penn Virginia
Corp, Energy XXI and Baker Hughes, while decreasing a position in EQT Corp..
Most of those moves appeared prescient. Shares in those companies fell except
for EQT, however, rallied 29 percent.
(Reporting by Sam Forgione; Editing by Jennifer Ablan and Cynthia Osterman)
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