On September 17, I penned a piece, Five Billionaire-Owned Energy Stocks To Buy Now, that made the case for the wealth building opportunity represented in the beaten down energy sector, and specifically energy stocks owned by billionaire investors.
As a former hedge fund trader, I’m well aware that cheap stocks are cheap for a reason, and, most times, stocks can stay cheap for a long time. Most importantly, they tend to only revalue when there is the presence of a catalyst, something fresh, something new that creates change in the long term outlook for the company and its stock.
There is perhaps no bigger potential catalyst to reverse the tide for energy stocks than the prospect of an OPEC production cut.
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In fact, the famed billionaire oil trader, Andy Hall, recalled in a recent investor letter the massive one day move that took place in the price of oil at the mere a hint of an OPEC policy change back in August of 1986. It spiked oil prices by 50% in just 24 hours.
On that note, the head of OPEC spoke today, and noted that the broad producer production cuts (non-OPEC- mainly U.S.) have been so dramatic that less supply and higher prices will follow. The International Energy Agency said the cuts for the year were the highest in the history.
Is the bottom in for oil?
Could this be the catalyst that marks the bottom for oil stocks? The price of oil is already up more than 4% on the day. And some of the most beaten down energy stocks have as much as, doubled just in the past 48-hours.
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If this event serves as the catalyst for higher oil prices and a bottom in energy stocks, then there will be a lot of money to made buying “cheap” stocks.
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Below are the five energy stocks we said three weeks ago to “buy now.” While a few have had sharp moves already, each of them represents the potential for triple digit moves if the bottom in oil is in.
Even better, each stock has the presence of an influential billionaire investor. (For our full list of energy stocks to buy, get our free report at BillionairesPortfolio.com.)
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1) SandRidge Energy (SD) - Billionaire investor Prem Watsa owns almost 11% of SandRidge. This stock traded above $4 last November, when oil was $70. That’s 700% higher than its current share price today.
2) Oasis Petroleum (OAS) – Billionaire hedge fund manager John Paulson owns nearly 7% of this stock. Additionally, SPO Advisory, a $7 billion activist hedge fund, owns almost 15% and has been buying the stock on almost every dip. When oil was last $70, OAS was trading $25, or 94% higher than current levels. [
3) Whiting Petroleum (WLL) - Billionaires John Paulson and Andreas Halvorsen, of the hedge fund Viking Global, own a combined 10% of WLL. And the company has officially put itself up for sale! This stock traded at $52 when oil was last at $70. That would be a 153% return from its share price today.
4) Chesapeake Energy (CHK) – Billionaire investor Carl Icahn owns 11% of CHK and recently added to his position around $13. Chesapeake has halted their dividend and said they are looking at selling assets, all of which is bullish for the stock. The last time oil was $70, Chesapeake was $25. That would be a 182% return from its price today.
5)Transocean Energy (RIG) –Billionaire Carl Icahn also owns almost 6% of Transocean. RIG recently reported better than expected earnings this month. The last time oil was $70 Transocean was $24 or a 55% return from its share price today.
At Billionairesportfolio.com we follow the “best ideas” of the world’s top billionaire investors. You don’t have to be rich to take part. You don’t have to pay the hefty 2% management fee and 20% profit share to a hedge fund. You can follow the lead of powerful billionaire investors by simply buying the same stocks they do, in your own brokerage account. Join today and we will immediately send you the details on one of our portfolio stocks, owned by an activist investor that has a price target 1,800% higher than current levels.
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