A year ago, gurus like Steven Cohen (Trades, Portfolio), Leon Cooperman (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) bolted out of Carrizo Oil & Gas Inc. (NASDAQ:CRZO). The company was experiencing declining revenues and a rising debt load that was eroding its financial strength.
But now, a more favorable outlook for energy stocks, backed by strong first-quarter earnings, is turning some gurus back into the fold of this Houston-based oil and gas explorer. For three consecutive quarters, gurus like Ken Fisher (Trades, Portfolio) have opened positions, while others, including Louis Moore Bacon (Trades, Portfolio), have expanded their holdings.
Moore, the hedge fund manager, increased his holdings by 340% in the fourth quarter of 2017, amassing an estimated return of 58% on the energy producer. In the first quarter, Moore is sitting on an investment worth roughly $8 million. Shares stood at roughly $19 a share when he launched the position late last year.
On Wednesday afternoon, the stock stood at $29 a share, down 3%. Other energy stocks, like Exxon Mobil Corp. (NYSE:XOM) and Chevron (NYSE:CVX), saw declines of up to 3% on Wednesday afternoon as the markets shuddered over the unveiling of a new set of tarrifs on China. In mid-afternoon trading, the Dow Jones Industrial Average sunk 200 points.
Year to date, Carrizo has jumped 26%. The median price-sales chart by GuruFocus shows it is currently priced below its historical value.
A favorable commodity
In recent months, as oil prices have hit record highs, interest in energy stocks has taken a greater hold. On Thursday, the U.S. Energy Information Administration released its latest short-term economic update on energy prices, confirming expectations of unprecedented oil and natural gas production into next year.
The EIA estimates U.S. crude oil and dry natural gas production will easily