Contrarian Moves, Lucrative Energy Plays
Frank Holmes | Oct 15, 2013 04:34PM ET
Sometimes the most attractive energy assets aren’t found in the ground. Rather, at times like today, they are listed on the stock exchange.
Billionaire businessman Carl Icahn is one investor seeing value in energy companies. The hedge fund manager recently announced his purchase of 60 million shares in the Canadian oil and gas producer, Talisman Energy Inc., (TLM). Icahn has built up a nearly 6 percent stake in the Calgary-based energy producer, worth a whopping $300 million. Even though the company has been a perennial underperformer, after Icahn’s tweet, the stock climbed to the highest level in more than a year.
Investors should expect more M&A activity, especially in the natural gas area, according to Oil and Gas Investor. As natural gas prices stabilized “non-Free Trade Agreement approvals are starting to flow, and there is a steady stream of announced petrochemical and other gas-fed projects.” And with M&A expected to be resurging soon and big hedge fund managers participating, the energy sector will likely be gaining strength. You might not want to wait much longer.
Evan Smith, CFA contributed to the commentary.
Past performance does not guarantee future results.
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Holdings in the Global Resources Fund as a percentage of net assets as of 9/30/13: Antero Resources 0.0%, Chesapeake Energy 0.12%, Gulfport Energy 0.0%, Pacific Rubiales Energy 0.08%, Petrominerales 0.2%, Talisman Energy 0.0%, United States Natural Gas Fund 0.0%
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