Hess: Activist Investor Unlocks Shareholder Value $HES

By Bret Jensen

Hess (HES) is one of the core holdings in my portfolio. I took a small position in the shares early in 2012 when the shares were trading in the low-60s just before a series of management missteps knocked the stock down to the mid-40s. I consistently added shares over the summer as the shares were incredibly undervalued at those levels. In addition, analysts and insiders were lining up behind the stock at this point. HES became one of the top ten holdings in my portfolio during that time and one that has been on the upswing since the end of summer. The cheap shares drew attention and ire from activists, especially Elliott Management, and they have forced management to make better strategic and capital allocation decisions culminating in today’s major announcement.

As an investor, I will be looking forward to seeing how Hess monetizes its gathering facilities in the Bakken. I would be very interested if it spins this off in some sort of energy MLP structure. I would not be as interested in the retail operations unless it sports a significant valuation discount to competitors. Overall, this is one of the most ambitious transformations I have seen in a while in the energy space. It bodes well for shareholders and gives the stock further upside. A big shout out to Elliott Management for being the bee who bit the bull to get the bull to start bucking. Well done.

About Bret Jensen

Daily columnist for RealMoney. Chief Investment Strategist (CIS) for S.A.M (Simplified Asset Management), a long/short hedge fund based in Miami, Florida from 2008 to 2011. Fund was in top five percent of long/short hedge funds for total return in its first full year(2009) ranked by Hedgeco fund database(over 450 funds in category).

Content Sources

Photo Credit

This is not an offer to buy or sell securities. Oil investment carries with it very high risks. The information contained within this site has not been nor will it be verified by Envestor First and is subject to change at any time. We are not a United States Securities Dealer or Broker or United States Investment Adviser. Do your own due diligence and consult with a licensed professional before making any investment decisions. Please read our full disclaimer before making any decisions.

Comments are closed.

Oil Projects & Oil Investment Consulting

Oil Projects & Oil Investment Consulting

Oil Projects & Oil Investment Consulting

Oil Projects & Oil Investment Consulting

Permian Basin Stocks

Permian Basin Stocks

Archives