It's time to check in again on T. Boone Pickens, but this time we'll look at his investments from a fresh angle. At Stockpickr we like to see what the big guns are buying and make a decision whether to piggyback their investments.
When it comes to oil, T. Boone Pickens is an expert. His BP Capital fund has made billions trading the commodity, and now he's calling for $80-a-barrel oil. Each of his stock investments is a bet on oil going in that direction.
column earlier this month
, I looked at
, a list of some of the dividend-paying stocks -- such as
-- Pickens is betting on.
However, we thought it made sense to get another stock pro's take on
. And who better than our own Jim Cramer?
So we set up the portfolio of
. Basically, this list offers Cramer's stance on a few of Pickens' holdings. We gleaned Cramer's opinions from comments made on his "Mad Money" TV show, in his
blog posts and in his Wall St. Confidential interviews on TheStreet.com TV.
First on the list is
, which represents 10.7% of Pickens' portfolio.
: In a
May 17 video
for TheStreet.com TV, Cramer said that Valero's stock serves as his "tell" for gasoline. "I think that worry
high gasoline prices has passed," he said.
To watch Alix Steel's video take of this column, click here
And in the
segment of a "Mad Money" show from earlier this month, Cramer said of Valero: "Those margins cannot be sustained." He wrapped up his bearish call for the stock by saying, "I want Valero sold."
Back in a
May "Stop Trading" segment
, Cramer admitted: "I have had enough of Valero." Cramer said the refiners have had a good run but that the run may well be over, with margins peaking during the summer driving season. Cramer said "you can't own these" with margins peaking, so he's selling the group.
Next up is
, which makes up 7.2% of Pickens' portfolio.
: From the
May 29 "Mad Money" recap
"GlobalSantaFe should be acquired by somebody because it has so much business to do," Cramer said. "Moreover, once the private-equity firms realize the sustainability of the earnings in the sector, they should come in," Cramer said. However, he doesn't expect this will happen until the fall.
May 15 RealMoney blog post
Cramer adds, "But the fact remains that finding oil's become so difficult that you need the help of the major deepwater drillers -- GlobalSantaFe ... along with the service companies Schlumberger -- to find and bring the oil to the market."
Schlumberger accounts for 5.4% of Pickens' portfolio.
: Cramer explains in a June 18 blog post: "We all know that pressure pumping is weak because Schlumberger has been saying that for months. Schlumberger has also made it clear that it will get worse before it gets better."
, Cramer says, "when
deepwater-drilling announcements come out, a stock like Schlumberger will move up a lot, and then keep moving up." It's a very "unhealthy" pattern longer term, Cramer said, because the stocks shouldn't be going up over and over again on the same piece of information.
However, the pattern "usually tends to last much longer than people think, which is why I'm advising people to go buy in-the-money calls," he said. If a stock is at $100, "go buy the $90 call," and as the stock gets hit, periodically buy more.
Next on the list is
, which makes up 4.8% of Pickens' portfolio.
: In a June 4 blog post, Cramer says:
Occidental is telling you an interesting story. The management sits down with the sell side and everyone goes nuts for the name, even though there was little that was new other than the company spending a ton of money on capital expenditures, something that's viewed as negative in most industries. ...Put simply, the oil group is discounting mid-$40s, and the longer oil stays up here and the longer it is clear that the price at the pump can be sustained without a drop-off, you have no reason to pay less than 10 times earnings for a high-quality, mostly domestic oil and gas producer.
Cramer sees a bunch of stocks on the decline that are interesting and Occidental is one of them. "It's been right to buy Occidental when it is down. I would swing at that one," Cramer says.
The next stock on today's list is
, another Pickens holding.
Cramer explains Halliburton's current situation in a June 18 blog post: "I am not denying pressure-pumping price pressure. I am just saying that the company's stock reflects the dramatic increase in pressure-pumping capacity that is driving rates down."
And in a June 20 blog post, Cramer says he'd buy Halliburton, "as people are worried about a preannouncement, but given that it just announced the date of its earnings, I believe the worries are overblown."
Last on today's list is
, another component of Pickens' portfolio.
: Cramer has said his favorite coal name is Peabody Energy, a stock that was down on Goldman's June 18 downgrade of the sector. He says he would keep buying the stock even though people are betting against coal.
June 18 "Mad Money" recap
: Peabody, he said, is "well placed" to supply coal to China and India, with 8% of its reserves in Australia. Plus, China is getting rid of its import tariff on coal, which is good for foreign competitors such as Peabody that want Chinese exposure.
Moreover, the stock is "cheap" now and "well behind" where it should be, given the spike in oil, Cramer said. Peabody has been smart, acquiring and divesting itself of different assets to become a "leaner, meaner" coal company, which is what Wall Streeters look for.
...Further, Peabody has "great visibility," he said, and is set to establish the first coal-to-liquids facility in the U.S. this year. It is the less-risky way to play the technology, Cramer said.
While we realize this is just a sampling of Pickens' stocks, it makes sense to get another investor's take on at a least a few of the large holdings that many of us are looking at on a daily basis. The goal is to continually build an "edge," so if this gives us even the slightest improvement in our approach then it is well worth it.
At the time of publication, Altucher and/or his fund had no positions in stocks mentioned, although positions may change at any time.
James Altucher is president of Stockpickr LLC, a wholly owned subsidiary of TheStreet.com and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs several quantitative-based hedge funds as well as a fund of hedge funds. He is also the author of
Trade Like a Hedge Fund
Trade Like Warren Buffett
. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback;
to send him an email.
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