Jefferies Makes Huge Media & Entertainment Addition to Franchise Picks List

Diamondback Energy

This is a top Permian Basin play for more aggressive accounts. Diamondback Energy Inc. (NASDAQ: FANG) is an independent oil and natural gas company headquartered in Midland, Texas, and focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian in West Texas.

Diamondback’s activities are primarily focused on the horizontal exploitation of multiple intervals within the Wolfcamp, Spraberry, Clearfork and Cline formations.

Wall Street analysts have noted in the past the company’s top-tier asset base, solid accretive additions and financial discipline, which they think allows for not only continued solid cash flow, but could put the company in play as a takeover target. Diamondback continues to drill some of the most economical wells in the United States as efficiencies improve, costs decrease and activity remains in the better regions.

The $165 Jefferies price target compares with the consensus target of $161.82 and the most recent close at $132.09 a share.

Golar LNG

This is the premier company in the world for LNG distribution. Golar LNG Ltd. (NASDAQ: GLNG) is one of the world’s largest independent owners and operators of LNG carriers and floating storage and regas units (FSRUs). The company has 14 vessels in its fleet, three LNG carriers slated for floating LNG platform (FLNG) conversion, 10 LNG carriers and one FSRU.

Collectively with Golar Partners and Golar Power, the fleet has 16 LNG carriers, three FLNGs/candidates and eight FSRUs. GLNG is the general partner for Golar LNG Partners. Its joint ventures, Golar Power and OneLNG, are focused on FSRU conversions and FLNG projects.

Jefferies has set its price target at $35. The consensus price objective is $36.06, and the stock closed Thursday at $28.03.

Marathon Petroleum

With a big deal in place, this company is poised to be the biggest refinery in the United States. Marathon Petroleum Corp. (NYSE: MPC) is one of the newest members of the Jefferies Franchise List, and it is at the beginning of the long process of completing a massive purchase of another refining giant. The company agreed to buy rival Andeavor for $23.3 billion in the biggest-ever deal for an oil refiner.

The offer, payable in either cash or shares, values Andeavor at about $152.27 a share. That represents a 24% premium over the closing price the prior to the announcement. Following the deal, Marathon will be the largest operator of refining capacity in the United States, and most on Wall Street believe that management can achieve the $1 billion in synergies it has suggested.

Shareholders are paid a 2.53% dividend. Jefferies has a $95 price target for the stock. The consensus target was last seen at $97.62, and the shares closed last Thursday at $72.86.

One brand new addition to the Franchise Picks List and four top energy companies with distinctly different businesses that offer investors a variety of ways to play the energy sector, from aggressive exploration and production, to LNG, to large cap integrated to natural gas. While they vary greatly in risk, they all make sense for long-term investors looking to be in the sector, especially with oil tumbling recently.