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James Li
James Li
Articles (762)  | Author's Website |

Ken Fisher’s Top 4 New Energy Holdings in 1st Quarter

Guru’s top new holdings include several oil and gas production companies

April 22, 2019 | About:

Ken Fisher (Trades, Portfolio), CEO and chief investment officer of Fisher Investments, disclosed this week his top new buys for the first quarter included four oil and gas companies: Hess Corp. (NYSE:HES), Marathon Oil Corp. (NYSE:MRO), Devon Energy Co. (NYSE:DVN) and EOG Resources Inc. (NYSE:EOG).

Fisher, son of legendary investor Phil Fisher, invests using a top-down approach: According to Fisher Investments’ website, the firm believes 70% of the investment returns are attributable to a portfolio’s general asset allocation, while the remaining 30% are attributable to the specific allocation of stocks and bonds. As of quarter-end, the equity portfolio contains 819 stocks, of which 74 are new holdings.

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Fisher’s top sectors in terms of portfolio weight are technology, financial services and health care. On the other hand, the energy sector represents just 7.18% of the equity portfolio, making it the fifth-largest sector.

Hess

Fisher purchased 2,044,909 shares of Hess, giving the stake 0.14% equity portfolio space. Shares traded at an average price of $54.80 during the quarter.

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The New York-based company explores and produces crude oil and natural gas primarily in key areas in the Bakken Shale region, Guyana, the Gulf of Mexico and Southeast Asia. GuruFocus ranks Hess’ financial strength 5 out of 10: Although the company’s Piotroski F-score ranks a satisfactory 6 out of 10, its debt-to-equity ratio of 0.69 underperforms 60% of global competitors. Additionally, Hess’ interest coverage of 1.33 is below Benjamin Graham’s safe threshold of 5, suggesting potential problems paying interest expenses.

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Marathon Oil

Fisher purchased 5,038,421 shares of Marathon Oil, giving the position 0.10% weight in the equity portfolio. Shares averaged $16.32 during the quarter.

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The Houston-based company primarily focuses on unconventional resources in the U.S. GuruFocus ranks the company’s profitability 5 out of 10: Although it has a strong Piotroski F-score of 8, Marathon’s three-year revenue growth rate of 2.20% underperforms 67% of global competitors. Despite this, net profit margins are close to the 10-year high of 28.08%.

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Devon Energy

Fisher purchased 2,410,565 shares of Devon Energy, giving the stake 0.09% equity portfolio weight. Shares averaged $27.85 during the quarter.

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GuruFocus ranks the Oklahoma City-based company’s profitability 6 out of 10: Gross profit margins are still outperforming 82% of global competitors despite declining approximately 2.7% per year over the past five years. Likewise, operating margins are outperforming 59% of global energy production companies.

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Devon Energy’s financial strength ranks 6 out of 10: Even though debt ratios are underperforming over 70% of global competitors, the company’s Piotroski F-score of 8 suggests strong business operations.

EOG Resources

Fisher purchased 209,797 shares of EOG Resources, giving the holding 0.02% equity portfolio weight. Shares averaged $95.33 during the quarter.

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Houston-based EOG Resources produces oil and gas in several areas, including the Permian Basin, the Eagle Ford and the Bakken Formation. GuruFocus ranks the company’s financial strength 6 out of 10: Even though the interest coverage of 19.62 underperforms over 70% of global competitors, EOG Resources has a strong Piotroski F-score of 8 and a solid Altman Z-score of 3.88.

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Disclosure: No positions.

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About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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