Energy Investor T. Boone Pickens' 3 New Oil Stock Picks

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Jan 07, 2015
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As oil tumbled to its five-and-a-half year low of $51.12 per barrel on Tuesday, energy guru T. Boone Pickens announced that he acquired six new stocks in the third quarter, three of which were oil and gas companies.

The chairman of BP Capital Management’s Portfolio is 97.8% composed of energy stocks, and he believes the price for oil is going to rise in the near future.

“I said it would be back up to $100 a barrel [in] 12 to 18 months,” he told Fox News on Monday. “Demand, with the lower price of oil, demand will come up,” he added.

Pickens also said he expected increased mergers and acquisitions activity in the oil industry with the fall in prices.

In the third quarter, Pickens’ three new energy stock buys were: Western Refining Inc. (WNR, Financial), WPX Energy Inc. (WPX, Financial), Gastar Exploration Inc. (GST, Financial).

Western Refining Inc. (WNR, Financial)

Pickens purchased 158,982 shares of Western Refining Inc., a sizable 6.5% portion of the portfolio. The stock’s price in the third quarter averaged $43.

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Western Refining Inc. was incorporated on Sept. 16, 2005 under Delaware law. Western Refining Inc. has a market cap of $3.56 billion; its shares were traded at around $36.11 with a P/E ratio of 8.90 and P/S ratio of 0.20. The dividend yield of Western Refining Inc. stocks is 3.0%.

WPX Energy Inc. (WPX, Financial)

Pickens purchased 44,363 shares of WPX Energy Inc., for 1% of the portfolio. The stock’s average price for the third quarter was $24. It has since dropped about 55% to $10.59 on Wednesday.

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WPX Energy Inc. is a Delaware Corporation formed in 2011 to effect the separation from The Williams Companies Inc. WPX Energy Inc. has a market cap of $2.15 billion; its shares were traded at around $10.59 with and P/S ratio of 0.70.

Gastar Exploration Inc. (GST, Financial)

Pickens purchased 177,549 shares of Gastar Exploration, also spanning 1% of the portfolio. The stock’s third quarter price average was $7. Shares have since dropped by 72% to around $2.10 per share on Wednesday.

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Gastar Exploration USA Inc. is a Houston-based independent E&P engaged in the exploration, development and production of natural gas and oil in the U.S. Gastar Exploration Inc. has a market cap of $160.10 million; its shares were traded at around $2.03 with a P/E ratio of 16.10 and P/S ratio of 1.0.

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