Robert Rodriquez’s top purchases last quarter are: Cimarex Energy Co. (XEC, Financial), St. Mary Land & Exploration Company (SM, Financial), Atwood Oceanics Inc. (ATW, Financial), BJ Services Company (BJS, Financial), Pride International Inc. (PDE, Financial), On buying these Oil & Gas companies, Dennis Bryan and Rikard Ekstrand said the following in the March 31 2009 Letter to Shareholders:
No. 1: Cimarex Energy Co. (XEC), Add: 55% - Total: 538,200 Shares
Cimarex Energy is an independent oil and gas exploration and production company. Cimarex Energy Co. has a market cap of $2.88 billion; its shares were traded at around $34.54 with a P/E ratio of 6.5 and P/S ratio of 1.5. The dividend yield of Cimarex Energy Co. stocks is 0.7%. Cimarex Energy Co. had an annual average earning growth of 18.6% over the past 5 years.
No. 2: St. Mary Land & Exploration Company (SM), Add: 37% - Total: 736,000 Shares
ST. Mary land & Exploration Company is an independent oil and gas company with diversified interests in the United States and internationally a development project in Russia and exploration projects in Canada Chile the Philippines and Trinidad and Tobago. St. Mary Land & Exploration Company has a market cap of $1.42 billion; its shares were traded at around $22.81 with a P/E ratio of 7.8 and P/S ratio of 1.1. The dividend yield of St. Mary Land & Exploration Company stocks is 0.4%. St. Mary Land & Exploration Company had an annual average earning growth of 29.3% over the past 10 years. GuruFocus rated St. Mary Land & Exploration Company the business predictability rank of 3.5-star.
No. 3: Atwood Oceanics Inc. (ATW), Add: 70% - Total: 676,100 Shares
Atwood Oceanics Inc is engaged in the business of international offshore drilling and completion of exploratory and developmental oil and gas wells as well as related support management and consulting services. Atwood Oceanics Inc. has a market cap of $1.79 billion; its shares were traded at around $27.93 with a P/E ratio of 6.7 and P/S ratio of 3.4. Atwood Oceanics Inc. had an annual average earning growth of 7.8% over the past 10 years.
No. 4: BJ Services Company (BJS), New Holdings, Total: 2,159,800 Shares
BJ Services Company is a provider of pressure pumping and other oilfield services serving the petroleum industry worldwide. BJ Services Company has a market cap of $4.69 billion; its shares were traded at around $16.07 with a P/E ratio of 9.1 and P/S ratio of 0.9. The dividend yield of BJ Services Company stocks is 1.2%. BJ Services Company had an annual average earning growth of 24.7% over the past 10 years. GuruFocus rated BJ Services Company the business predictability rank of 3-star.
Pride International Inc. (PDE), New Holdings, Total: 1,288,000 Shares
Pride is an international provider of contract drilling and relatedservices operating both offshore and on land. Pride International Inc. has a market cap of $4.46 billion; its shares were traded at around $25.71 with a P/E ratio of 6.7 and P/S ratio of 1.9. Pride International Inc. had an annual average earning growth of 4.5% over the past 10 years.
Performance Since March 31, 2009
With oil price climbed to $68 per barrel from $40s at the beginning of the year, Robert Rodriguez’s heavy bet proved pretty smart, at least for short term. The equity portfolio performed handsomely since the quarter end of 1Q09, shooting up 54% from April 1 to June 1, 2009.
In the energy area, we added to existing positions in Patterson-UTI Energy, Atwood Oceanics and Rowan Companies. We initiated new positions in two oil service companies, BJ Services and Pride International, and five exploration and production companies, Newfield Exploration, CNX Gas, St. Mary Land & Exploration, Cimarex Energy, and Cabot Oil & Gas. We acquired the oil service companies at historically depressed valuations for quality companies with little to no debt on the balance sheet. Rowan Companies, a leading jackup rig company, was added to at one third of our estimate for replacement value and 65% of its book value. Atwood Oceanics, a jackup rig and semi-submersible company, was added to at less than half our estimate of replacement value. Patterson-UTI Energy was added to at one third of our estimate for replacement value and the company has net cash on the balance sheet. BJ Services, the leader in pressure pumping and other oilfield services in the U.S., was acquired at 1.2x book value, 6x trailing earnings, and it has a strong balance sheet with low teens debt to capital. Pride International, a leading jackup and semi-submersible company, was acquired at one third of our estimate for replacement value and 75% of its book value. It has a strong balance sheet with 15% debt to capital.
We began buying five oil and gas exploration companies, when their stock prices were cut in half or more from recent highs, at what we believe are depressed prices. We have waited for over five years to build a position in many of these companies and have slowly been buying them on weakness in the last six months. For example, St. Mary Land & Exploration was purchased around 5x trailing earnings and 1.2x book value. It has a strong balance sheet with 31% net debt to capital. Cimarex Energy was purchased at 4x trailing earnings and 70% of book value with a single digit net debt to capital. Newfield Exploration was added at 65% of book value and has a strong balance sheet with 32% debt to capital. All of these companies have proved reserves with a long life, in the range of 8-10 years or more, and they have substantial potential reserves that have not yet been proved up. Newfield Exploration, for example, has large prospective acreage in the Woodford Shale which is economical even at low commodity prices. Newfield will be looking to prove up this acreage over the next decade.
No. 1: Cimarex Energy Co. (XEC), Add: 55% - Total: 538,200 Shares
Cimarex Energy is an independent oil and gas exploration and production company. Cimarex Energy Co. has a market cap of $2.88 billion; its shares were traded at around $34.54 with a P/E ratio of 6.5 and P/S ratio of 1.5. The dividend yield of Cimarex Energy Co. stocks is 0.7%. Cimarex Energy Co. had an annual average earning growth of 18.6% over the past 5 years.
No. 2: St. Mary Land & Exploration Company (SM), Add: 37% - Total: 736,000 Shares
ST. Mary land & Exploration Company is an independent oil and gas company with diversified interests in the United States and internationally a development project in Russia and exploration projects in Canada Chile the Philippines and Trinidad and Tobago. St. Mary Land & Exploration Company has a market cap of $1.42 billion; its shares were traded at around $22.81 with a P/E ratio of 7.8 and P/S ratio of 1.1. The dividend yield of St. Mary Land & Exploration Company stocks is 0.4%. St. Mary Land & Exploration Company had an annual average earning growth of 29.3% over the past 10 years. GuruFocus rated St. Mary Land & Exploration Company the business predictability rank of 3.5-star.
No. 3: Atwood Oceanics Inc. (ATW), Add: 70% - Total: 676,100 Shares
Atwood Oceanics Inc is engaged in the business of international offshore drilling and completion of exploratory and developmental oil and gas wells as well as related support management and consulting services. Atwood Oceanics Inc. has a market cap of $1.79 billion; its shares were traded at around $27.93 with a P/E ratio of 6.7 and P/S ratio of 3.4. Atwood Oceanics Inc. had an annual average earning growth of 7.8% over the past 10 years.
No. 4: BJ Services Company (BJS), New Holdings, Total: 2,159,800 Shares
BJ Services Company is a provider of pressure pumping and other oilfield services serving the petroleum industry worldwide. BJ Services Company has a market cap of $4.69 billion; its shares were traded at around $16.07 with a P/E ratio of 9.1 and P/S ratio of 0.9. The dividend yield of BJ Services Company stocks is 1.2%. BJ Services Company had an annual average earning growth of 24.7% over the past 10 years. GuruFocus rated BJ Services Company the business predictability rank of 3-star.
Pride International Inc. (PDE), New Holdings, Total: 1,288,000 Shares
Pride is an international provider of contract drilling and relatedservices operating both offshore and on land. Pride International Inc. has a market cap of $4.46 billion; its shares were traded at around $25.71 with a P/E ratio of 6.7 and P/S ratio of 1.9. Pride International Inc. had an annual average earning growth of 4.5% over the past 10 years.
Performance Since March 31, 2009
With oil price climbed to $68 per barrel from $40s at the beginning of the year, Robert Rodriguez’s heavy bet proved pretty smart, at least for short term. The equity portfolio performed handsomely since the quarter end of 1Q09, shooting up 54% from April 1 to June 1, 2009.
