This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Hedge Funds' Best Picks Show the Way for 2012


The energy sector saw plenty of hedge fund activity and it's no wonder why. Through Nov. 10, energy stocks in the S&P 500 are up 3.7% this year, the fourth-best performer of the 10 sectors. In November, energy stocks are up 1.4%, the top gaining sector of the entire S&P 500. This performance comes as crude oil prices have surged from about $80 per barrel in October to more than $100.

This upward move in crude prices and energy stocks has likely benefitted a handful of hedge fund managers, assuming they continue to hold shares of oil stocks. David Tepper with Appaloosa Management, Carl Icahn, Harbinger Capital's Phil Falcone, Baupost Group's Seth Klarman and SAC Capital's Steven Cohen all upped their exposure to energy stocks during the third quarter,

It hasn't all been about the recent jump in the price of oil, though. In the third quarter, the energy sector as a whole saw earnings growth of 52%, the highest of any other sector during the quarter and by a wide margin, according to FactSet Research analyst John Butters. In addition, earnings for energy companies in the S&P 500 should climb another 4% in 2012 based on analysts' estimates.

Among the favored picks, both Tepper and Klarman picked up shares of BP (BP - Get Report), the British oil giant still recovering from the April 2010 Gulf oil spill. Cohen's picks in the energy sector were recent spinoff Marathon Petroleum (MPC) and HollyFrontier (HFC), the latter of which was also a favorite of Tepper. Icahn's only energy buy was on the soon-to-be-acquired El Paso (EP), while Falcone picked up shares of Exco Resources, an oil and natural gas exploration company.

Interestingly, those fund managers who reduced their exposure to the energy sector -- notably Sandell Asset Management, Tudor Investment and Moore Capital -- sold shares of Exco Resources. The stock is down more than 38% this year, so perhaps they were cutting losses and moving on. However, since the end of September, shares of Exco are up more than 10%.

CVR Energy (CVI) was another energy name that found hedge fund managers on either side. Eton Park and GLG Partners sold the stock while Harbinger Capital bought shares. Similarly, while Och-Ziff bought up Exxon Mobil (XOM) shares, Tudor Investment was selling.
2 of 11

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.03 0.21%
BAC $14.84 0.34%
BP $33.55 0.18%
C $46.73 0.00%
GOOG $691.02 0.00%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs