Energy stocks a good buy on oil drop: Billionaire
Billionaire investor Marc Lasry told CNBC on Friday he sees opportunity in energy stocks, given the recent pullback on plunging oil prices .
"A number of equities have gotten hit anywhere between 25 to 50 percent because prices have come in so much on the oil side," he said. "The equities of these companies are trading pretty cheaply."
Lasry is the founder, chairman, and CEO of Avenue Capital, an investment firm with $14 billion in assets under management. While Lasry is mainly focusing on buying distressed debt of companies, he said in a " Squawk Box " interview that energy stocks are now a good bet.
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"From a macro standpoint you want to be in energy. The U.S. is going to be energy sufficient," he continued, saying in the long term he'd consider the sector a buy. "Over the course of the next two, three or four years, [investors] are going to end up doing well." While refusing to name names because of compliance restrictions, he did say the energy players he would buy must be sound from a credit standpoint.
Admittedly, Lasry said individual investors can't really play in his arena. "What we try to do is buy the debt at a discount," he said, anywhere from 60 to 70 cents on the dollar. But he often converts the debt into equity in the company.
Ford (NYSE:F) is among Lasry's recent investments. "We ended up buying the debt. And then after we moved down to the equity, we think it's cheap relative to where the others are trading," he said.
He also likes YRC Worldwide (YRCW), a transportation services holding company. "We ended up buying the debt, converted that debt into equity. I think it's up 30 percent from where we bought it. Again, we think it's pretty cheap relative to where their peers are trading."
As for the bond market, Lasry thinks the 10 year Treasury yield is more likely to hit 2 percent before 3 percent. "You're not going to see rates moving up over the next six months."
Over the course of the next two years, the 10 year would hit 3 percent first, he added.
One of the new owners of the Milwaukee Bucks , Lasry and Fortress Investment Group's Wesley Edens bought the NBA team along for $540 million in April. It was a rather well-timed purchase because it came just months before the Los Angeles Clippers sold for $2 billion to former Microsoft (MSFT) CEO Steve Ballmer.
"I'd say that's the best investment I personally made on a short-term basis," Lasry said.
