Oil Makes An Impressive Debut In WCG Management’s Top Q4 Stock Picks

#3 Visa Inc (NYSE:V)

Shares Owned by WCG Management (as of September 30): 320,495 shares

Value of Holding (as of September 30): $22.18 million

After increasing its stake by 946% during the second quarter, WCG Management again increased its stake in Visa Inc (NYSE:V), by 16% or 46,000 shares during the third quarter. Although shares of the payments technology company remained nearly flat during the third quarter, they are trading up by 19.1% year-to-date thanks mostly to the significant move upwards that they enjoyed during October. On October 2, the same day that it reported its third quarter results, the company also announced that it has agreed to acquire Visa Europe in a $23.4 billion deal. The two entities had parted ways in 2007 after Visa Inc (NYSE:V) announced its plan to go public. For the third quarter, Visa reported EPS of $0.62 on revenue of $3.60 billion versus analysts’ expectations of EPS of $0.63 on revenue of $3.56 billion. On November 3, analysts at Susquehanna reiterated their ‘Positive’ rating on the stock and also increased their price target on it to $87 from $85. Ken Fisher‘s Fisher Asset Management was the largest shareholder of the company at the end of June among the funds tracked by Insider Monkey, owning nearly 14.55 million shares.

#2 Canadian Pacific Railway Limited (USA)(NYSE:CP)

Shares Owned by WCG Management (as of September 30): 152,751 shares

Value of Holding (as of September 30): $22.45 million

Canadian Pacific Railway Limited (USA)(NYSE:CP) was the stock in which WCG Management increased its stake the most significantly during the third quarter, by 531% or 128,572 shares. After remaining range-bound for the first four months of the year, shares of the transcontinental railway operator have had a gradual decline since then and currently trade down by 28% year-to-date. On October 21 the company came out with better-than-expected third quarter earnings, reporting EPS of $2.69 on revenue of $1.71 billion. Analysts had expected the company to report EPS of $2.67 on revenue of $1.69 billion. Following the earnings release, several analyst and brokerages increased their rating or price target on the stock. Among them were analysts at RBC Capital who reiterated their ‘Sector Perform’ rating on the stock, while upping their price target on it to $213 from $202. Renowned activist investor Bill Ackman‘s Pershing Square was the largest shareholder of the company at the end of June among the hedge funds we cover; it held slightly above 13.94 million shares as of June 30.

#1 Noble Energy, Inc. (NYSE:NBL)

Shares Owned by WCG Management (as of September 30): 780,000 shares

Value of Holding (as of September 30): $23.61 million

Finally, it seems the 28.93% drop that the shares of Noble Energy, Inc. (NYSE:NBL) suffered during the third quarter made it too lucrative for WCG Management to resist, as the independent energy company ended up making its debut in the fund’s portfolio right at the very top. On October 29, it was reported that the company is planning to cut more jobs to deal with the decline in crude oil prices.  Yesterday Noble Energy, Inc. (NYSE:NBL) announced that it expects gas to flow from one or both of its discoveries in the Tamar and Leviathan fields in Israel after the company’s Board makes final investment decisions (FIDs). Although the company disappointed in both earnings and revenue when it reported its third quarter results recently, shares of the company still saw an uptick after the earnings release. Noble Energy reported a per share loss of $0.21 on revenue of $801 million, versus analysts’ consensus estimate of a per share loss of $0.15 on revenue of $962.20 million. Following the results, analysts at Macquarie reiterated their ‘Neutral’ rating on the stock, but upped their price target on it to $38 from $36. Doug Gordon, Jon Hilsabeck and Don Jabro‘s Shellback Capital was one of the hedge funds that initiated a stake in the company during the second quarter; as of June 30, it held 600,000 shares.

Disclosure: None