NEW YORK (Reuters) – Corvex Management supervisor Keith Meister on Tuesday named Diamondback Energy Inc. one of many hedge fund’s prime funding picks after the power firm bought a rival final yr.
FILE PHOTO: Keith Meister, Managing Partner and Chief Investment Officer of Corvex Management, speaks in the course of the Sohn Investment Conference in New York City, U.S., May eight, 2017. REUTERS/Brendan McDermid/File Photo
“We think there is lots of value,” Meister stated on the 13D Monitor Active-Passive Summit. He stated he expects Diamondback’s administration group will do all the suitable issues to spice up returns.
Chevron’s deliberate acquisition of Anadarko introduced final week marked a turning level for oil and fuel exploration and manufacturing corporations, Meister stated.
“I would not have pitched this idea one week ago,” he stated, including that the tempo of takeovers is probably going not over but.
“I think there is going to be a lot of activity” within the sector, he stated.
Diamondback acquired rival Energen, one other Corvex activism goal, in a $9.2 billion deal final yr. Meister stated Diamondback has nonetheless been underperforming, nevertheless.
When Meister spoke about Energen final yr, he stated that buyers have to be affected person and famous that by ready till Diamondback made its transfer, “the size of the prize went up.”
Investors haven’t paid sufficient consideration to the power and manufacturing sector, Meister stated.
“No one owns energy stocks, but if you do own them, you have to be in one place, the Permian basin,” he stated, referring to the oil-rich area in West Texas the place Diamondback has operations.
Diamondback and rivals Pioneer Natural Resources Co. and Concho Resources will possible not be unbiased corporations three to 5 years from now, he stated.
Reporting by Svea Herbst-Bayliss and Jessica DiNapoli; Editing by Chizu Nomiyama and Sonya Hepinstall