Stockpickr: Checking In With T. Boone Pickens

Another fund that I like to track that owns Tesoro shares is the Al Frank fund. The fund specializes in deep value positions, usually stocks trading below book value and at extremely low multiples over cash flows. The Al Frank fund has a five-year annualized return of 15%.

A key fact about Pickens is that he has proven to be prescient regarding the price of oil. He is a believer in "peak oil theory," the idea that the planet has already reached its peak oil-production capabilities and that all the oil supplies will become depleted fairly soon. Pickens' portfolio can be thought of as a peak oil index.

In January when oil was at $50, he stated in a Wall Street Journal article that it would head back to $70, which it did this past week. In a speech from early March, Pickens said, "The world has been looked at. There's still oil to be found, but not in the quantities we've seen in the past. The big fields have been found, and the smaller fields, well, there's not enough of them to replenish the base." He predicted oil prices would rise this year to an average of about $70 per barrel.

One of Pickens' interesting new holdings is Fluor(FLR Quote). Among other things, Fluor helps build refineries and drilling sites for oil companies. It also does a lot of work for the U.S. government, with a focus on the Department of Energy and the Department of Homeland Security, and it participates in environmental restoration and management for the government.

The company has been around since 1912 and is here to stay, with a little over $400 million net cash in the bank and trading at just 13 times EBITDA (earnings before interest, taxes, depreciation and amortization).