By Sam Forgione
NEW YORK (Reuters) - Top U.S. investors' plays on energy stocks diverged in the first quarter, with some cutting stakes and others increasing, as oil prices seesawed and roiled shares in the sector.
Hedge funds such as David Tepper's Appaloosa Management and Daniel Loeb's Third Point showed bullish moves toward the sector, while Warren Buffett's Berkshire Hathaway (NYSE:BRKa) also appeared sanguine on the sector by maintaining a big stake in U.S. pipeline operator Kinder Morgan (NYSE:KMI), U.S. Securities and Exchange Commission filings showed Friday and Monday.
Barry Rosenstein's Jana Partners, George Soros' Soros Fund Management and Leon Cooperman's Omega Advisors sold several stakes in energy companies.
Third Point took stakes in natural gas companies Targa Resources Corp and Williams Companies Inc (NYSE:WMB) of 1.8 million shares and 2 million shares, respectively, while selling a stake in Clayton Williams Energy Inc of 400,000 shares. Williams said last week that it had filed a lawsuit against Energy Transfer Equity LP to prevent it from terminating its once-coveted deal for Williams.
Targa Resources rose 10.3 percent in the first quarter, but Williams fell 37.5 percent, and Clayton Williams shares lost 70 percent of their value.
Appaloosa increased its stake in Williams Partners LP, a natural gas infrastructure master limited partnership (MLP) by 10.9 million units to 13.2 million units. The fund also increased its stake in Energy Transfer Partners LP by 11 million units to 16.2 million units.
Appaloosa was less optimistic on Kinder Morgan and cut its stake by 4.9 million shares to 4.5 million shares, however, diverging from Berkshire's unchanged position of 26.5 million shares. Berkshire's bullish bias was likely profitable in the quarter, with shares up nearly 20 percent.
These hedge-fund SEC disclosures are backward-looking and come out 45 days after the end of each quarter. Still, the filings offer a glimpse into what hedge fund managers saw as investment opportunities.
The first quarter was a rollercoaster for U.S. crude prices, which sank to a nearly 13-year low of $26.05 a barrel on Feb. 11 before recovering all those losses and ending the quarter 3.5 percent higher, at $38.34 a barrel.
That multi-year low in U.S. crude prices, which marked a more than 75 percent decline from highs hit in mid-2014, was touched after data showing strong growth in U.S. and global oil inventories, and U.S. investment bank Goldman Sachs (NYSE:GS) called for depressed prices until the second half of the year.
The sharp rebound in prices was powered by major producers’ plans to freeze output, declining U.S. oil output and strong gasoline demand.
BEARISH TILTS
Jana Partners sold its entire stake in Williams of 3.8 million shares, opposing Third Point's new bet on the natural gas company. Williams shares stumbled as U.S. natural gas futures fell more than 16 percent in the first quarter to $1.959 per million British thermal units.
Omega Advisors sold its entire stake in Anadarko Petroleum Corp (NYSE:APC) of 272,000 shares, while trimming its position in Gulfport Energy Corp by 362,000 shares to 209,000 shares. Omega also sold its entire stake in Atlas Energy Group of 3.9 million shares.
Soros Fund Management sold entire stakes in Valero Energy Corp (NYSE:VLO), Penn Virginia Corp, Energy XXI and Baker Hughes, while decreasing a position in EQT Corp (NYSE:EQT)..
Most of those moves appeared prescient. Shares in those companies fell except for EQT, however, rallied 29 percent.