Jim Cramer vs. Serafino Iacono: Who knows Colombia oil? (GXG, PRE.to, EC)

Who do you trust for advice on Colombia oil stocks? Back on Feb. 10, you could have ” listened to Jim Cramer, Bloomberg, and many Colombian brokerages who were pawning off shares of newly listed oil companies onto the locals.

Here’s how a few Colombia oil stocks did in the year before that date. The blue shaded patch on the chart is a crude oil ETF, which basically shows the price of oil. (I grabbed these stocks somewhat arbitrarily — EC and PRE.to are the biggest oil companies in Colombia, and AMER.l has been very active lately. The little juniors could be swapped, the results are unlikely to change much. Feel free to redo the chart yourself.)

Nice: Almost all of these stocks had beaten the raw material over a 1-year time period. The only one that was down was star-crossed Alange (now PetroMagdalena). How have these same companies done since then?

Meh. State oil company Ecopetrol has almost managed to tread water. Everyone else has tumbled.

Of course, you could also have listened to one of Colombia’s savviest oil investors, Serafino Iacono. He knew Colombia was cheap several years ago, and he got in while the getting was good. While Mr. Iacono hasn’t gone on CNBC and hit red buttons that yell “sell sell sell,” actions speak louder than Jim Cramer’s sound effects pad. Iacono has sold a net $11.5 million in Colombia oil stocks this year: he sold $12 million of Pacific Rubiales and bought about a half-million dollars in Alange and PetroMagdalena. Here are his net sales in Canadian dollars, as culled from the SEDI website:

Alange Total                 $472,422.50
PetroMagdalena Total          $37,866.00
Pacific Rubiales Total   -$12,050,750.80
Grand Total              -$11,540,462.30

(Positive numbers are purchases, negative numbers are sales.)

It would have been wise to follow his lead and sold PRE.to over the course of the year. His average selling price has been $28.71 a share, well above the current sub-$20 price.

The PetroMagdalena and Alange purchases also need to be taken with a grain of salt for two reasons. First, Iacono had been off the Alange board of directors for over a year, and then rejoined in April. Second, recall that Alange-cum-Petromagdalena is being sued by shareholders. Something one sometimes sees during shareholder suits is that a big holder will call the company and say, hey, I won’t sue, but you have to take my shares at price X. So it’s possible that some of these purchases were executed in order to avoid legal hassles. This is just speculation on my part, maybe Iacono really likes PetroMagdalena.

Man, I wonder if Iacono will threaten me with a defamation suit for complimenting his investing acumen.