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There was definite energy spin this week at the 18th Ira Sohn Investment Conference at New York’s Lincoln Center. In fact, at this an annual gathering of some of the world’s influential money managers and investors, energy was applauded as one of the best investments to make now.
Some 3,000 guests paid as much as $100,000 (proceeds benefit pediatric cancer resesarch) to hear what 17 of Wall Street’s lucrative members had to say about the stock market. Each had some 15 minutes to share their picks, pans and opinion.
Clearly, energy was a favorite, as Barron’s outlined in its Ira Sohn coverage this week.
Here’s a roundup of what these money managers consider to be the best investments in the industry.
Energy’s Best Investments from Ira Sohn
Hedge fund titan David Einhorn of Greenlight Capital is a fan of Oil States International Inc. (NYSE: OIS). This Houston-based company is a diversified solutions provider for the oil and gas industry.
It also provides temporary and permanent workforce accommodations, including food service, facility management, wastewater treatment and redeployment logistics, primarily in Canada’s oil sands and Australia’ s mining region.
Einhorn said shares could increase from its current $100 to $155 if it goes ahead with plans to spin off its workers accommodation business into a REIT. The company discussed such a move first with Jana Partners, and more recently with the Securities and Exchange Commission.
“We wish them [OIS] luck, we will sit back and enjoy the ride,” Einhorn told the audience, after indicating the accommodation business should be worth about $6.9 billion.
The stock is up about 8% this week, getting a boost from Einhorn’s Ira Sohn shout out.
Tor Olav Troim, of Norwegian investing firm Fredriksen Group, sang the praises of companies involved in deep water oil and gas drilling. Troim touted companies involved with providing floating rigs and transportation infrastructure, plus shipping companies involved in energy transport.
Some of the best investments in this field include Frontline Ltd. (NYSE: FRO), Ship Finance International Ltd. (NYSE: SFL), and Golar LNG (Nasdaq: GLNG). Frontline rose 13% Friday, SFL is up about 3% this year, and GLNG’s one-year target price represents a 33% premium to Friday’s close.
Also at Ira Sohn, Keith Meister, considered a “rising star” in hedge funds, pointed to pipeline companies as places to hunt for energy gains.
Highfields Capital Management’s Jonathon Jacobson said investors should focus on energy investments that have payouts supported by strong cash flow, not capital markets financing.
Finally, Goldman Sachs Group Inc (NYSE: GS) chief U.S. equity strategist David Kosten, also took a shine to energy.
His fresh U.S. Monthly Chartbook is filled with 40 stocks he deems most undervalued. Names run the gamut of telecom to tires. But oil and gas firms, including refiners and drillers, dominated the list. Gains between 23%-57% are possible, according to Kosten.
Some of the names making Kosten’s list include:
- Apache Corp. (NYSE: APA)
- Newfield Exploration Co. (NYSE: NFX)
- Anadarko Petroleum Corp. (NYSE: APC)
- Marathon Oil Corp. (NYSE: MRO)
- Devon Energy Corp (NYSE: DVN)
- Phillips 66 (NYSE: PSX)
- Marathon Petroleum Corp (NYSE: MPC)
For a closer look at some of the best investments in energy, don’t miss this: Why Oil Refiners Are Among the Best Energy Stocks to Buy Now
- Business Insider:
Goldman: These Are The 40 Most Undervalued Stocks In The Market
First Rosenstein, Now Einhorn: Oil States International gets attention
Sohn Conference Preview: Jeffrey Gundlach Sees No ‘Big Rotation’ Into Equities
Take-A-Look-Ira Sohn Investment Conference in New York
Energy Takes Center Stage at Sohn Conference