As oil prices are looking to rebound, the energy sector has been able to garner the support of more money managers. According to Morningstar data, the sector has gained some 6.36% year-to-date. We decided to take a closer look at the energy companies which have the most backing as of March 31, from the over 700 hedge funds that we track . The list was headed by Sunedison Inc (NYSE:SUNE), Cheniere Energy, Inc. (NYSEMKT:LNG), Anadarko Petroleum Corporation (NYSE:APC), Macquarie Infrastructure Company LLC (NYSE:MIC), and Baker Hughes Incorporated (NYSE:BHI).
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Sunedison Inc (NYSE:SUNE) occupies the first spot as 94 hedge funds have poured in an aggregate investment of $4.44 billion into the company as of the end of the first quarter compared to 80 firms with $3.73 billion invested at the end of 2014. David Einhorn‘s Greenlight Capital and Larry Robbins‘ Glenview Capital were the two largest shareholders of Sunedison Inc (NYSE:SUNE) with 24.95 million and 11.96 million shares respectively at the end of March. The stock of the $8.08 billion operator of clean power generation assets has appreciated by a staggering 57.2% year-to-date. Sunedison Inc (NYSE:SUNE) is planning to launch an IPO for its second yieldco after its first, TerraForm Power Inc (NASDAQ:TERP) went public last summer. The new yieldco will have a proposed maximum value of $700 million. The dividend growth-oriented yieldco is aiming to operate clean power generation assets in emerging markets including China, Brazil, India, South Africa, Peru, Uruguay, Malaysia and Thailand. While Sunedison Inc (NYSE:SUNE) has been growing quickly by piling on considerable amounts of debt (long term debt stood at $7.75 billion at the end of the first quarter) in the prevalent low interest rate environment, that capital structure could pose problems in the future when rates begin to rise.
The popularity of Cheniere Energy, Inc. (NYSEMKT:LNG) among hedge funds increased to 11.1% at the end of the first quarter, up from 10.2% in the previous quarter. Hedge fund investments in the company climbed to $9.75 billion from 81 funds up from $7.96 billion from 75 firms at the end of last year. Andreas Halvorsen‘s Viking Global held the largest stake in Cheniere Energy, Inc. (NYSEMKT:LNG) with some 15.45 million shares valued at $1.20 billion. The $18.22 billion energy company’s stock is up by nearly 7% year-to-date as compared to a 0.26% gain for the Oil & Gas Midstream industry in the same period. Cheniere Energy, Inc. (NYSEMKT:LNG)’s Sabine Pass LNG terminal is set to become the first large-scale plant to ship LNG from the continental U.S as its first train is expected to start production this year. Recently, federal regulators granted the company permission to expand its LNG production facilities by another two trains, taking the total to six. The prevailing low price of oil and a slowdown in Asia’s economy are some factors that weigh on Cheniere Energy, Inc. (NYSEMKT:LNG)’s future prospects, at least in the short run.
Although a popular energy company among hedge funds, Anadarko Petroleum Corporation (NYSE:APC) saw a decrease in interest as 73 firms had $4.46 billion worth of investment in the company as compared to 87 funds with $5.61 billion in the previous quarter. While Ken Griffin‘s Citadel Investment Group increased its stake in Anadarko Petroleum Corporation (NYSE:APC) by 7% in the first quarter to 5.27 million shares, Paul Singer’s Elliott Management trimmed its holding by 8% to 4.25 million shares. A collapse in energy prices led Anadarko Petroleum Corporation (NYSE:APC) to miss the estimates for both its top and bottom line for the first quarter. However, quarterly production hit a record high with an average volume of 920 boe/day as compared to 789 boe/day in the year-ago period.
Macquarie Infrastructure Company LLC (NYSE:MIC) occupied the fourth spot as it was found in the portfolios of 70 hedge funds, who had $2.30 billion in total investment, up from 64 funds with $2.01 billion invested at the end of 2014. Richard McGuire’s Marcato Capital Management held 3.53 million shares valued at $290.66 million at the end of March. Macquarie Infrastructure Company LLC (NYSE:MIC)’s stock has appreciated by nearly 20% year-to-date.
Lastly, Baker Hughes Incorporated (NYSE:BHI) saw a slight increase in popularity among hedge funds to 9.2% as compared with 8.8% in the previous quarter, with investments rising to $4.24 billion from 67 hedge funds an increase from the $3.71 billion invested by 65 funds at the end of last year. Baker Hughes Incorporated (NYSE:BHI)’s stock is up by about 16.9% year-to-date. Following the acceptance of Halliburton Company (NYSE:HAL)’s $35 billion bid for Baker Hughes by the shareholders of both companies, Halliburton is proceeding with divesting assets to satisfy antitrust concerns. The first round involves a divesture of $3.5 billion of assets. Among the funds that we track, Jeffrey Ubben’s ValueAct Capital is the largest shareholder of Baker Hughes Incorporated (NYSE:BHI) with 23.25 million shares.
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