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Fueled by Passion, Pickens Educates America - Review of Low P/E Stocks

December 21, 2013 | About:
Sally Jones

Sally Jones

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Fueled by passion, T. Boone Pickens Jr. makes age 85 look like the new 60. He has a net worth of around $1.2 billion, according to Forbes, as of March 2013. Ranked as the 377th richest person in America, Pickens also shows up as 360th on the Forbes 400 list. Pickens is a legendary philanthropist but he is also concerned about leaving another kind of legacy, a pathway to America’s energy self-reliance. Guru Pickens genuinely cares about America, so much that he’s created videos to educate us about the changing world of energy.

For years, Pickens has spoken out on the need for alternative energy, with world oil production entering a period of irreversible decline. Pickens has promoted the use of natural gas for heavy duty trucks, ships and locomotives since around 1997, claiming that natural gas is much cleaner and cheaper than diesel. He has been a catalyst for the trucker and transporter industry to convert to natural gas for fuel.

Pickens also advocates for the U.S. to become self-reliant on its own natural gas resources and separate from OPEC oil. In one of his educational energy videos, he agrees that the age of the electric car is here, but he asks the key question, “At what price?”

Oklahoma-born, Pickens is an American businessman who chairs the private equity firm BP Capital Management. During the 1980s, he earned a reputation as a corporate raider.

The portfolio of T. Boone Pickens of BP Capital currently lists 17 stocks, four of them new, with a total value of $60 million with a quarter-over-quarter turnover of 36%. As of Sept. 30, 2013, the Pickens portfolio is weighted in ETF, options, preferred at 100% and energy at 90.9%. The stocks bought by T. Boone Pickens averaged a 12-month return of 10.2%.

Here’s an update on the three lowest P/E stocks in the Pickens’ portfolio, as of Sept. 30, 2013.

Gastar Exploration Inc. (GST), PE: 8.50

Weightings: 7.5%

Current Shares: 1,138,859

Value: $4,498,000

Up 377% over 12 months, Gastar Exploration Inc. has a market cap of $365.59 million; its shares were traded at around $5.96 with a P/B ratio of 4.40. The company does not pay a dividend.

GuruFocus ranks GST with one star out of five stars for business predictability.

Guru Action: As of Sept. 30, 2013, T. Boone Pickens gained 72.8% on his holding of 1,138,859 shares at an average price of $3.45 per share.

Over his trading history, he has averaged a gain of 44% buying 1,298,565 shares at an average price of $4.13 per share. Selling, he gained 138% on 159,706 shares at an average price of $2.50 per share.

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Valero Energy Corporation (VLO), P/E: 10.80

Weightings: 3.4%

Current Shares: 60,000

Value: $2,049,000

Up 54% over 12 months, Valero Energy Corporation has a market cap of $25.62 billion; its shares were traded at around $47.49 with a P/B ratio of 1.40. The dividend yield is 1.79%.

GuruFocus ranks VLO with one star out of five stars for business predictability.

Guru Action: As of Sept. 30, 2013, T. Boone Pickens increased his position by 163.33%, buying 37,215 shares at an average price of $35.35 per share, for a gain of 34.3%.

He has averaged a gain of 92% buying 392,170 shares at an average price of $24.71 per share. Selling, he gained 23% on 332,170 shares at an average price of $38.73 per share.

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Exxon Mobil Corporation (XOM), P/E: 12.70

Weightings: 10.7%

Current Shares: 75,000

Value: $6,453,000

Up 14% over 12 months, Exxon Mobil Corporation has a market cap of $431.08 billion; its shares were traded at around $98.68 with a P/B ratio of 2.50. The dividend yield is 2.50%.

GuruFocus ranks XOM with 2.5 stars out of five stars for business predictability.

Guru Action: As of Sept. 30, 2013, T. Boone Pickens made a new buy of 75,000 shares at an average price of $90.16 per share, for a gain of 9.4%.

In the first quarter of 2012, Pickens sold out 94,310 shares at an average price of $85.89 per share, gaining 14.9%.

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Here’s the complete portfolio of T. Boone Pickens.

Use the GuruFocus Value Screen to find 52-Week Lows and discover potentially deep value stocks held by billionaire Guru investors.

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 4.6/5 (9 votes)

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