Corvex Management manager Keith Meister on April 16 named Diamondback Energy Inc. one of the hedge fund's top investment picks after the energy company bought a rival last year.

"We think there is lots of value," Meister said at the 13D Monitor Active-Passive Summit. He said he expects Diamondback's management team will do all the right things to boost returns.

Chevron Corp.’s planned acquisition of Anadarko Petroleum Corp. announced last week marked a turning point for oil and gas exploration and production companies, Meister said.

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"I would not have pitched this idea one week ago,” he said, adding that the pace of takeovers is likely not over yet.

"I think there is going to be a lot of activity" in the sector, he said.

Diamondback acquired rival Energen, another Corvex activism target, in a $9.2 billion deal last year. Meister said Diamondback has still been underperforming, however.

When Meister spoke about Energen last year, he said that investors need to be patient and noted that by waiting until Diamondback made its move, "the size of the prize went up."

Investors have not paid enough attention to the energy and production sector, Meister said.

"No one owns energy stocks, but if you do own them, you have to be in one place, the Permian Basin," he said, referring to the oil-rich region in West Texas where Diamondback has operations.

Diamondback and rivals Pioneer Natural Resources Co. and Concho Resources Inc. will likely not be independent companies three to five years from now, he said.