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FPA Capital Reduces Oil & Gas Companies - COG Gains 450%

By: GuruFocus
Posted: 10/25/2013 7:06:00 PM
Referenced Stocks: COG;NFX;RDC

In a portfolio heavily weighted with the energy sector at 39.7%, at least part of FPA Capital's third quarter reduction theme was about trimming high-gaining oil and gas companies, including Cabot Oil & Gas Corp. ( COG ), a stock that averaged a 450% gain for FPA Capital over five years.

The third quarter portfolio update of FPA Capital lists 27 stocks with one of them new. The fund's total value is $799 million, with a quarter-over-quarter turnover of 2%.

FPA Capital has averaged a return of 26.44% over 12 months.

Here's a review of three oil and gas-related companies FPA Capital reduced as of the quarter ending Sept. 30, 2013:

Cabot Oil & Gas Corp. ( COG ): Reduced

Impacts Portfolio: -0.53%

Current Shares: 80,800

Up 56% over 12 months, Cabot Oil & Gas Corp. has a market cap of $15.58 billion; its shares were traded at around $36.97 with a P/E of 75.30 and a P/B of 7.00. The dividend yield is 0.10%.

Cabot Oil & Gas Corporation is an independent oil and gas company engaged in the development, exploitation, production and marketing of natural gas and to a lesser extent, crude oil. The company also transports, stores, gathers and purchases natural gas for resale.

Guru Action: As of Sept. 30, 2013, FPA Capital reduced its position by 59.84%, unloading 120,400 shares at an average price of $37.48, taking a slight loss of 1.3%, compared to a history of very high gains.

Across a five-year history, FPA Capital has averaged a 450% gain on 419,600 shares bought at an average price of $6.72 per share. Selling 338,800 shares at an average price of $29.48 per share, the firm has gained 25%.

Track historical pricing, revenue and net income:



Rowan Companies PLC ( RDC ): Reduced

Impacts Portfolio: -0.81%

Current Shares: 2,065,700

Up 11% over 12 months, Rowan Companies PLC has a market cap of $4.54 billion; its shares were traded at around $36.55 with a P/E of 19.40. The company does not pay a dividend.

Incorporated in 2012, Rowan Companies PLC provides international and domestic contract oil and gas drilling services. The company also owns and operates a manufacturing division that produces equipment for the drilling, mining and timber industries. Rowan provides contract drilling services utilizing a fleet of 31 self-elevating mobile offshore drilling platforms and 29 marketed deep-well land drilling rigs.

Guru Action: As of Sept. 30, 2013, FPA Capital reduced its position by 8.48%, unloading 191,300 shares at an average price of $35.94, gaining 1.7%.

Across a five-year history, FPA Capital has averaged an 88% gain on 479,000 shares bought at an average price of $19.47 per share. Selling 787,600 shares at an average price of $36.03 per share, the firm has gained 1%.

Track historical pricing, revenue and net income:





Read about FPA Capital's highest-impact reductions made in third quarter .

Newfield Exploration Company ( NFX ): Reduced

Impacts Portfolio: -0.41%

Current Shares: 947,500

Up 15% over 12 months, Newfield Exploration Company has a market cap of $4.24 billion; its shares were traded at around $31.26 with a P/B of 1.50. The company does not pay a dividend.

Formed in 1988, Newfield Exploration Company is an independent energy company engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids. Its domestic areas of operation include the Mid-Continent, the Rocky Mountains and onshore Gulf Coast. Internationally, the company has offshore oil developments in Malaysia and China. As of December 31, 2012, the company owned an interest in approximately 780,000 net acres in Rocky Mountains. About one-third of its total proved reserves are located in the Uinta Basin.

Guru Action: As of Sept. 30, 2013, FPA Capital reduced its position by 12.85%, selling 139,700 shares at an average price of $25.06, gaining 24.7%.

Across a five-year history, FPA Capital has averaged an 18% gain on 1,890,800 shares bought at an average price of $26.55 per share. Selling 943,300 shares at an average price of $41.56 per share, the firm has gained 25%.

Track historical pricing, revenue and net income:



Here is the complete portfolio of FPA Capital.



Be sure to read:

1. FPA Capital's Undervalued Stocks
2. FPA Capital's Top Growth Companies
3. FPA Capital's High Yield stocks
4. Stocks that FPA Capital keeps buying

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