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James Li
James Li
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Oaktree's Top 5 Buys of the 2nd Quarter

Top buys of Howard Marks’ firm include 2 petroleum companies

August 15, 2019 | About:

Oaktree Capital Management disclosed this week its top five buys for the second quarter were Vistra Energy Corp. (NYSE:VST), Berry Petroleum Corp. (NASDAQ:BRY), Petroleo Brasileiro SA Petrobas (NYSE:PBR), Star Bulk Carriers Corp. (NASDAQ:SBLK) and Huya Inc. (NYSE:HUYA).

Since its formation in 1995, Oaktree Chairman Howard Marks (Trades, Portfolio) has been responsible for ensuring the firm’s adherence to its core investment philosophy and communicating closely with clients concerning the firm’s products and strategies. Oaktree, which is involved in less efficient markets and alternative investments, invests heavily in debt, preferred stocks and convertible bonds.


As of quarter-end, Oaktree’s $4.18 billion equity portfolio contains 82 stocks, of which eight represent new positions. The firm’s top four sectors in terms of portfolio weight are industrials, financial services, utilities and energy.


Vistra Energy

Oaktree added 4.1 million shares of Vistra Energy, increasing the stake 17.05% and the equity portfolio 2.22%. Shares averaged $25.07 during the quarter.


The Irving, Texas-based company engages in various electricity market activities, including power generation, wholesale energy sales and purchases, commodity risk management and retail sales of electricity to end users. According to GuruFocus data, Vistra Energy’s debt-to-equity ratio of 1.46 underperforms 56.89% of global competitors, while its debt-to-Ebitda ratio of 3.75 outperforms 63.06% of global competitors.


Berry Petroleum

Oaktree added 5.085 million shares of Berry Petroleum, increasing the stake 65.14% and the equity portfolio 1.29%. Shares averaged $11.34 during the quarter.


The Houston-based company engages in the production and development of oil and natural gas. According to GuruFocus, Berry Petroleum’s equity-to-asset and debt-to-equity ratios are outperforming over 52% of global competitors.


Petroleo Brasileiro

Oaktree purchased 2,200,848 shares of Petroleo Brasileiro, giving the holding 0.82% equity portfolio weight. Shares averaged $15.24.


Petrobas, a Brazilian integrated energy company, explores and produces oil and gas in Brazilian offshore fields. GuruFocus ranks the company’s financial strength 4.2 out of 10: Although the company has a strong Piotroski F-score of 8, Petrobas’ debt-to-equity ratio of 1.28 underperforms 85.71% of global competitors.


Star Bulk Carriers

Oaktree disclosed it owned 37,413,697 shares of Star Bulk Carriers as of June quarter-end, up 5.74% from the March quarter. Shares averaged $8.02 during the second quarter.


The Athens, Greece-based company provides seaborne transportation solutions in the dry bulk sector. According to GuruFocus data, the company’s debt ratios are underperforming at least 60% of global competitors.



Oaktree purchased 540,100 shares of HUYA, giving the position 0.32% weight in the equity portfolio. Shares averaged $22.96 during the quarter.


The Panyu, Guangzhou-based company said this week that revenues for the quarter ending June 30 were 2,010.50 million Chinese yuan ($292.90 million), up 93.6% from the prior-year quarter. Huya CEO Rongjie Dong said average monthly active users increased 57.3% year over year, driven by “enhanced partnership” with several major game studios and increased integration in the e-sports value chain.


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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