Kurt Billick‘s Bocage Capital recently filed its 13F form for the June 30 reporting period. The market value of the fund’s public equity portfolio stood at $185.25 million at that time, with the energy sector representing 37% of this value. The San Francisco-based Bocage Capital was founded in 2010 with the intention of focusing on global commodities. The firm currently has about $901 million in regulatory assets under management and a total of 14 employees. The turnover ratio within the fund’s portfolio was slightly on the higher end during the second quarter, standing at 68.75%. Moreover, the firm’s equity portfolio is also highly concentrated, as its top ten holdings represent nearly 90% of the total value. We decided to look at how the fund has managed its energy investments in the face of a challenging environment for energy companies. Bocage’s top equity picks in the sector are Dynegy Inc. (NYSE:DYN), Cabot Oil & Gas Corporation (NYSE:COG), and Tesoro Corporation (NYSE:TSO).
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Bocage has held a position in Dynegy Inc. (NYSE:DYN) since the second quarter of last year. The fund trimmed its stake in the $3.14 billion utilities company by disposing of some 12,200 shares during the most recently completed quarter, taking its stake to 770,400 shares valued at $22.53 million. The firm’s second-largest equity holding represented more than 12% of its portfolio. Dynegy Inc. (NYSE:DYN) operates 35 power stations in the Midwest, Northeast, and along the West Coast, generating 26,000 megawatts of electricity. Commodity-exposed equities have been taking a hit lately and Dynergy is no exception, as its stock price has fallen by more than 18% year-to-date. Moreover, Deutsche Bank recently lowered its price target for the company to $35 from $37 while maintaining its ‘Buy’ rating. Despite the challenging environment, analysts believe that the long-term thesis is intact, and upcoming catalysts include the PJM auction result and the updated PRIDE efficiency plans in November. Among the funds that we track, Howard Marks‘ Oaktree Capital Management is the largest shareholder of Dynegy Inc. (NYSE:DYN), holding about 9.80 million shares valued at $286.52 million.
The investment firm increased its stake in Cabot Oil & Gas Corporation (NYSE:COG) by 27% during the second trimester to 713,100 shares valued at $22.49 million. The stock price of the $11.18 billion independent oil & gas company has depreciated by nearly 9% so far this year. The company missed both the top and bottom line estimates in its financial results for the second quarter despite an increase in production on a year-over-year basis. The low commodity prices weighed heavily on Cabot Oil & Gas Corporation (NYSE:COG)’s performance. However, according to CEO Dan Dinges the future looks bright, as a new pipeline in the works will help the company market its gas and fetch a better price. Chilton Investment Company, which is led by Richard Chilton, holds about 350,000 shares of Cabot Oil & Gas Corporation (NYSE:COG) valued at $11.04 million as of the end of June.
Bocage upped its stake in Tesoro Corporation (NYSE:TSO) by 2% during the second quarter to 186,534 shares valued at $15.75 million. The $13.46 billion independent petroleum refining and marketing company is following anything but the general trend in the energy sector, as its stock has appreciated by more than 40% year-to-date, though this has been par for the course for the refining industry. The cheap crude has significantly expanded Tesoro Corporation (NYSE:TSO) and other refiners’ margins, which recently led to Tesoro hitting a 52-week high of $109.62, though it’s since dipped back down to $102.45. Besides delivering impressive second quarter results, the company is looking at a promising future as it continues to reduce operating costs, enhance the integration of its refining portfolio, and invest in organic growth. Robert Polak‘s Anchor Bolt Capital held about 725,900 shares of Tesoro Corporation (NYSE:TSO) valued at $61.27 million at the end of June.
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