T. Boone Pickens Predicts Oil Rebound, Buys 12 Energy Stocks

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Feb 21, 2015
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T Boone Pickens, a billionaire oil investor, took to Youtube on Friday to update his followers on his outlook for oil prices, which have dropped precipitously over the past six months.

Pickens started the video by reminding viewers that he said on Dec. 23, 2014, to “watch the rig count.”

“Now, we’re down today again 37 rigs. We’re down to 1,019 rigs. The rig count is going to go down further," he said. "Now this is painful. It’s painful of course for the guys working on those rigs, the service companies, everybody else. And we’re going to get tired of it. It’s going to change. The rig count will come on down. When it does, production will roll over, and we will be back going back up.”

He also retained his prediction for a time frame for prices to return to normal.

“I said on Dec. 23, give me 12 to 18 months, and we’ll be back to $80 or $90 a barrel," he said. "I still believe I’m right on that.”

His investing during the fourth quarter backed up his thesis. Pickens purchased 12 new oil and gas stocks out of 15 new stocks purchased in total. His four largest new buys were all oil and gas stocks: Southwestern Energy Co. (SWN, Financial), Concho Resources Inc. (CXO, Financial), Baker Hughes Inc. (BHI, Financial) and Anadarko Petroleum Corp (APC, Financial).

Southwestern Energy Co. (SWN, Financial)

Pickens purchased 112,819 shares of Southwestern Energy Co., a 6% portfolio weight. The stock’s average price for the quarter was $32.

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Southwestern Energy Co. was incorporated in Arkansas on July 2, 1929, as Arkansas Western Gas Company. Southwestern Energy Co. has a market cap of $9.73 billion; its shares were traded at around $27.48 with a P/E ratio of 12.90 and P/S ratio of 2.40.

Concho Resources Inc. (CXO, Financial)

Pickens purchased 28,938 shares of Concho Resources Inc., a 5.6% portfolio weight. The stock’s price averaged $105.

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Concho Resources Inc. is a Delaware corporation, which was formed in February 2006 as a result of the combination of Concho Equity Holdings Corp. Concho Resources Inc. has a market cap of $13.25 billion; its shares were traded at around $117.83 with a P/E ratio of 26.0 and P/S ratio of 4.70. Concho Resources Inc. had an annual average earnings growth of 21.9% over the past 10 years.

Baker Hughes Inc. (BHI, Financial)

Pickens purchased 27,187 shares of Baker Hughes, a 3% portfolio weight. The stock’s share price averaged $57.

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Baker Hughes Inc. is a Delaware corporation formed in April 1987. Baker Hughes Inc. has a market cap of $27.47 billion; its shares were traded at around $63.67 with a P/E ratio of 21.50 and P/S ratio of 1.18. The dividend yield of Baker Hughes Inc. stocks is 1.0%. Baker Hughes Inc. had an annual average earnings growth of 4.60% over the past 10 years. GuruFocus rated Baker Hughes Inc. the business predictability rank of 2-star.

Anadarko Petroleum Corp (APC, Financial)

Pickens purchased 5,684 shares of Anadarko Petroleum, a 0.91% portfolio holding. Anadarko’s share price averaged $87.

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Anadarko Petroleum Corp was incorporated in the State of Delaware. Anadarko Petroleum Corp has a market cap of $43.28 billion; its shares were traded at around $85.28 with and P/S ratio of 2.30. The dividend yield of Anadarko Petroleum Corp stocks is 1.2%. Anadarko Petroleum Corp had an annual average earnings growth of 12.2% over the past five years.

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