Third Point (Dan Loeb)
While Dan Loeb recently made headlines with his long position in Herbalife (HLF), the hedge fund manager has been quite active in the energy sector as well, adding several positions with the latest 13F.
One of the biggest: Marathon Petroleum (MPC). Loeb added 1.25 million shares of the firm, as well as a huge call option position in the beaten down refiner.
Right now, shares of Marathon are about $20 below their 52-week highs as investors have abandoned the company in the face of declining margins. Crack spreads between West Texas Indeterminate and Brent crude oil have drifted lower over the last few months as infrastructure bottlenecks are finally being eased out of the system.
But there’s still reasons to be bullish on MPC. The main one: Marathon continues to improve its other fundamentals. On a year-over-year basis, Marathon’s total revenue rose 27% in the second quarter. Meanwhile, refined product sales volume increased by a juicy 35%. Much of that increase in sales volumes comes from the firm’s rising export business. Marathon has the highest export rate of the refiners, at around 190,000 a day.
With a P/E under 8, Loeb knows a deal when he sees one.