Both oil futures and energy stocks have been volatile since last Thursday’s OPEC meeting, which yielded no production-cut agreement, despite the tumbling crude prices. Friday saw a 10% rout in West Texas crude, and stocks such as Transocean (RIG), Schlumberger (SLB) and Haliburton (HAL) followed suit. Then this week started off with a strong rally of nearly 5% in crude futures, and, although oil resumed its slide again on Tuesday, energy stocks rallied that day amid speculation that a bottom in prices had been formed.
Now, late in the week, crude is down again and several energy stocks are sliding after Saudi Arabia announced a price cut in the oil it exports to Asia and the U.S.; both West Texas crude and Brent are trading at multiyear lows below $70.
A true bottom in oil is impossible to call, and there are varying views among experts on how low it may go before a real recovery takes hold. Some analysts are saying oil could go as low as $40. But others, including legendary oil tycoon T. Boone Pickens, have had a more positive view. Pickens, in an interview with CNBC this week, called for a return to $100 in as little as 12 to 18 months; he also believes OPEC will actually cut production sometime in 2015 (he’s in the minority on this view).
Naturally, some investors are likely to be sniffing around battered energy stocks to play a possible recovery. Below are five energy stocks that some billionaire investors have taken large stakes in; they also have current analyst price targets that are well above where they are currently trading.
1) Penn Virginia (NYSE:PVA): Billionaire George Soros owns 8% of this company, and this summer he took an activist stance, filing a 13D pushing it to put itself up for sale. The Thomson/First Call consensus analyst price target is $16, and shares are currently trading at $5.01, which means, if analysts are right, that would be a whopping 215% gain.
2) SandRidge Energy (NYSE:SD): Billionaire Leon Cooperman owns 9% through his hedge fund, Omega Advisors. Cooperman this summer said he believes SandRidge could be worth as much as $10 a share. The consensus analyst price target is $5.08, which would still be a double from where SandRidge sells today.
3) and 4) Oasis Petroleum (NYSE:OAS) and Cobalt International Energy (NYSE:CIE): Billionaire John Paulson has been very bullish on energy stocks, and he currently owns 9.7% of Oasis and 9.9% of Cobalt. The Thomson/First Call consensus analyst price target on Oasis is $44, and Cobalt is at $21. Both stocks would more than double from their share price today based on those price targets.
5) Talisman Energy (NYSE:TLM): Billionaire Carl Icahn owns almost 6% of Talisman. Icahn’s significant energy bets this year have been the weakest spot in his portfolio, as Talisman, Transocean and Chesapeake (CHK) have tumbled. Talisman recently announced that their goal in 2015 was to sell at least $2 billion worth of their energy assets. Meanwhile, on Thursday, its shares plunged 12% and hit 52-week lows just above $4.The consensus analyst price target for shares is $9.36, which would be more than a 100% gain from where the stock is trading now.
Please don’t miss the opportunity to learn more about me and how we follow Billionaire Investors into stocks by visiting the Billionaires Portfolio.
The insider behind the Billionaire’s Portfolio is William Meade. William started his career with Wood Asset Management. Wood Asset Management was a $1.5 billion dollar institutional asset management firm and hedge fund, founded by Gary Wood, a former Goldman Sachs Partner and Harvard MBA. At Wood, William helped manage equity and fixed income portfolios for major university endowments, Fortune 500 pension funds and super high net worth clients (including 2 billionaire families).
Next, William was Director of ETF and Mutual Fund Research for Zacks Investment Research in Chicago. At Zacks, he worked with the founder Len Zacks, a PHD from MIT, in developing and maintaining a proprietary model that ranked over 20,000 ETFs and mutual funds. This model was viewed and used by over 150,000 people monthly, and was published in US News and World Report, and featured on CNN, Yahoo Finance, and Fortune.com.
William received a Masters in Economics from Johns Hopkins University, including PhD level coursework in International Economics. At Johns Hopkins, Mr. Meade was taught by Economists from The Federal Reserve and Department of Treasury. While at Johns Hopkins Mr.Meade consulted for a top hedge fund in Washington DC.