Although T. Boone Pickens is now 80 years old, he has the brain of a 55-year-old, according to an article in Forbes magazine that covered Pickens' MRI brain scan.
Pickens has a net worth of $3 billion and is head of the BP Capital Management hedge fund, was up 26% in 2006 and over 100% in 2005. He recently became a promoter of alternative energy and natural gas and started buying up water rights in a large way. He has donated more than $700 million to charity.
One technique that traders use is to follow in the footsteps of top traders, such as Pickens -- especially regarding stocks that were recently purchased.
One of the stocks that Pickens recently added to his hedge fund is Halliburton (HAL), the oil and gas services company. It just reported that its latest quarterly earnings beat Wall Street estimates, reporting 23 cents per share vs. analysts' expectations of 16 cents a share. The stock has a P/E of 12 and a PEG of 1.07, and it pays a yield of 0.7%.
Halliburton is also owned by another top trader, Leon Cooperman, founder of Omega Advisors., a New York-based $4.5 billion hedge fund. Cooperman formerly worked for 25 years at Goldman Sachs. Cooperman also owns Mirant (MIR), with a P/E of 5 and a PEG of 0.77; Atlas America (ATLS), with a P/E of 49; and Williams Companies (WMB), with a P/E of 14 and a PEG of 0.77.
Another stock that was picked up by Pickens in the last few months is XTO Energy (XTO), the oil and gas producer. It just priced its secondary public offering of 26 million new common shares at $48 per share, the proceeds of which would be used for its acquisitions. It also just reported a 33% increase in quarterly earnings. The company has a P/E of 13, a PEG of 1.03 and a yield of 0.8%.
XTO is also held by Quaker Strategic Growth Fund, a four-star-rated fund managed by Manu Daftary that has outperformed the S&P 500 index for eight consecutive years. The fund has had an average annual return of 17.94% over the last 10 years. Quaker Strategic also owns Transocean (RIG), with a P/E of 8; Freeport-McMoRan, with a P/E of 12; and Potash (POT), with a P/E of 44.
SandRidge Energy (SD) is another of Pickens' latest purchases. This oil and natural gas company recently announced its plans to sell its East Texas and North Louisiana assets. The stock has a forward P/E of 32 and a PEG of 2.31.
SandRidge shows up in the Stockpickr portfolio called Barron's Insider Purchases 7-19-2008. Other stocks in the portfolio include MSCI (MXB), with a P/E of 41, and Goodrich Petroleum (GDP), with a forward P/E of 45.
For all of his major shareholdings, check out the T. Boone Pickens portfolio at Stockpickr.com.
A note from James Altucher:
Every weekend I send an email to Jim Cramer and several hedge fund managers about the most interesting portfolios posted on Stockpickr that week. Usually those portfolios not only list stocks according to a theme but also offer significant analysis as to why the stocks are cheap.
Here are some examples:
Stocks related to drilling the Marcellus Shale
Microcaps trading for less than tangible book
Stocks that do well after Hurricanes
Here's the challenge: Build a portfolio at Stockpickr.com with great analysis, and send me the link. Each great portfolio (with analysis) will get posted on TheStreet.com with your byline (as a "Stockpickr Guest Columnist") and will be included in my email I send to Jim and the other
hedge fund managers on my list.
Posted on Aug. 5, 2008
