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Some Hedge Funds Suffer Massive Losses on Energy Stocks

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Huge stakes held by major hedge funds in energy

Hedge fund investors David Einhorn and Carl Icahn have placed massive bets on energy, which has proven to be a costly mistake so far. Oil has fallen from more than $100 per barrel during the summer of 2014 to its present ~$40 per barrel levels.

The nosedive in oil prices has taken a toll on several energy stocks. Chevron (CVX) and Exxon Mobil (XOM) have witnessed their profits fall by more than 50%.

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As seen from the above table, David Einhorn’s Greenlight Capital has got close to $500 million invested in Consol Energy (CNX), which has seen massive erosion in its share price over the past year. Similarly, Carl Icahn has got more than $2.7 billion invested in CVR Energy (CVI), which accounts for roughly 9% of the investor’s portfolio.

Berkshire Hathaway sells energy stock stakes in 2Q15 while Einhorn and Icahn hold on

Warren Buffet’s Berkshire Hathaway sold its entire stakes in Phillips 66 (PSX) and National Oilwell Varco (NOV), which together form 4.5% of the Energy Select Sector SPDR ETF (XLE). Holdings in the energy sector account for less than 1% of Berkshire Hathaway’s 2Q15 portfolio.

On the other hand, Carl Icahn has a 13% allocation to the energy sector while Einhorn’s Greenlight Capital has a 6% allocation to the energy sector. According to statistics provided by iBillionaire, Einhorn’s portfolio fell by 14% over the past year while Icahn’s portfolio suffered a loss of 24% over the same period.

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