Top US hedge fund managers made contrasting bets on energy companies in the first quarter, with Greenlight Capital's David Einhorn sticking with names pummeled by falling oil prices, while Hayman Capital's Kyle Bass bet on frackers, regulatory filings showed on Friday. Einhorn's $11 billion Greenlight Capital increased its stake in Consol Energy Inc by 7.3 million shares to 20.6 million shares and kept its stake in Oil States International Inc unchanged at 265,028 shares over the quarter, according to the Securities and Exchange Commission filings, despite losses of about 18 percent and 19 percent in those companies' respective stock prices.
Einhorn, an activist investor who made his name betting against Lehman Brothers months before the investment bank crumbled, slammed fracking companies at the Sohn Investment Conference in New York on May 4 as cash-burners. Consol is a coal and natural gas producer, while Oil States International is an oil services company. Hayman's regulatory filings, meanwhile, showed that the firm took small positions in each of the five fracking companies that Einhorn would later warn against, including Pioneer Natural Resources Co, which Einhorn called the "mother fracker."
US crude prices fell over 10 percent in the first quarter with prices hitting a six-year low of $42 a barrel on March 18. EOG and Whiting Petroleum Corp, two of the fracking companies Hayman bought that Einhorn later criticized, fell 0.4 and 6.4 percent, respectively. John Paulson's Paulson and Co reacted differently to the drop in Whiting's stock price and cut its stake in the company by 7.5 percent to 12.4 million shares. US crude, which has since recovered about 34 percent to nearly $60 a barrel since mid-March, was trading as high as $107 last June before being hit by oversupply.
Of Hayman's 26 positions in the first quarter, all but four were in energy companies. While small, with the biggest being a 114,143 share stake in exploration and production company Penn Virginia Corp, the positions were all new. Other top hedge funds reacted differently to falling oil prices, with Soros Fund Management increasing its stake in oil services company Baker Hughes Inc by 6.6 percent to 407,580 shares and Dan Loeb's Third Point LLC cutting its stake in Phillips 66 by 1 million shares to 4 million shares. Baker Hughes and Phillips 66 performed well in the quarter despite the oil rout, rallying 13.4 percent and 10 percent, respectively.
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