10 Best Crude Oil Stocks To Buy Today

Published on October 27, 2022 at 9:21 am by Umar Farooq in Hedge Fund Analysis, Hedge Funds, News

In this article, we discuss the 10 best crude oil stocks to buy today. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Crude Oil Stocks To Buy Today.

The energy industry rebounded sharply in 2022 from the low recorded during the pandemic. According to U.S. Energy Information Administration, the OPEC+ bloc’s intention to drastically reduce oil supply to the market has halted oil supply growth for the rest of this year and into next, increasing market volatility and raising worries about energy security. Many oil and gas businesses seek to reinvent themselves as 2023 approaches by focusing on financial health, adopting capital discipline, addressing climate change, and transforming business models. Some of the best energy companies to invest in include Devon Energy Corporation (NYSE:DVN), Occidental Petroleum Corporation (NYSE:OXY), and Chesapeake Energy Corporation (NYSE:CHK).

Photo by Viktor Kharlashkin on Unsplash

Our Methodology

We analyzed the crude oil stocks that recently received positive analyst ratings, and have strong financial statements and business growth potential. Using Insider Monkey data, we ranked these crude oil stocks based on the number of hedge funds that held positions in them at the end of the second quarter of 2022.

Best Crude Oil Stocks To Buy Today

10. Matador Resources Company (NYSE:MTDR)

Number of Hedge Fund Holders as of Q2, 2022: 24

Matador Resources Company (NYSE:MTDR) is an independent energy company that explores crude oil and natural gas assets. The Texas-based oil and gas company operates in the Delaware Basin, Eagle Ford shale, and Haynesville shale. More than 100,000 barrels of oil equivalent are currently produced each day by Matador Resources Company (NYSE:MTDR).

On October 14, Arun Jayaram, a JPMorgan analyst, maintained an Overweight rating on the shares while lowering his price target for Matador Resources Company (NYSE:MTDR) from $71 to $67. The analyst anticipates a “solid operational update” and in-line financial results from Matador Resources Company (NYSE:MTDR) Q3 announcement. The analyst lowered his price target to account for recent strip pricing.

According to Insider Monkey’s Q2 data, Matador Resources Company (NYSE:MTDR) was found in the public stock portfolios of 24 hedge funds, with collective stakes in the company worth $250.23 million. Among the hedge funds being tracked by Insider Monkey, Adage Capital Management is a leading shareholder in Matador Resources Company (NYSE:MTDR), with 1.11 million shares worth more than $51.84 million.

Just like, Devon Energy Corporation (NYSE:DVN), Occidental Petroleum Corporation (NYSE:OXY), and Chesapeake Energy Corporation (NYSE:CHK), Matador Resources Company (NYSE:MTDR) is one of the best energy stocks to buy today.

09. Hess Corporation (NYSE:HES)

Number of Hedge Fund Holders as of Q2, 2022: 35

Exploration and production firm Hess Corporation (NYSE:HES) purchases, transports, produces, and sells crude oil, natural gas, and natural gas liquids (NGLs). On October 19, Jefferies analyst Lloyd Byrne initiated coverage of Hess Corporation (NYSE:HES) with a Hold rating and a $140 price target.

The rise in energy prices this year has given most oil and gas equities a boost, including Hess Corporation (NYSE:HES), whose shares are currently trading more than 80% higher year to date. Hess Corporation (NYSE:HES) is one of the greatest bets in the oil and gas sector, given the high rate of inflation and the fact that the energy sector is the final resort for investors looking to safeguard their portfolios. Hess Corporation (NYSE:HES) has been paying regular dividends to its shareholders for the past 32 years. It has a forward dividend yield of 1.16% with a payout ratio of 27.29% as of October 20. It paid a quarterly dividend of $0.38 per share to its shareholders on September 30. According to Insider Monkey’s Q2 data, 35 hedge funds were long Hess Corporation (NYSE:HES), compared to 40 funds in the preceding quarter. Adage Capital Management is a prominent stakeholder in the company, with 2.5 million shares worth $270 million.

Along with Devon Energy Corporation (NYSE:DVN), Occidental Petroleum Corporation (NYSE:OXY), and Chesapeake Energy Corporation (NYSE:CHK), Hess Corporation (NYSE:HES) is one of the best energy stocks to buy today.

08. APA Corporation (NASDAQ:APA)

Number of Hedge Fund Holders as of Q2, 2022: 36

APA Corporation (NASDAQ:APA) is a Texas-based company that explores, develops, and produces oil and gas properties. Heading into the winter, energy stocks like APA Corporation (NASDAQ:APA) will potentially continue to benefit despite a stagflationary economic backdrop. On September 14, APA Corporation (NASDAQ:APA) declared a $0.25 per share quarterly dividend, a 100% increase from its prior dividend of $0.13. The dividend is payable on November 22, to shareholders of record on October 21. The board of directors also authorized an additional 40 million shares for repurchase.

Among the hedge funds tracked by Insider Monkey, 36 were long APA Corporation (NASDAQ:APA) at the end of June 2022, compared to 46 funds in the earlier quarter. Harris Associates is the leading position holder in the company, with 16.7 million shares worth about $582 million.

Here is what Oakmark Select Fund has to say about APA Corporation (NASDAQ:APA) in its Q1 2022 investor letter:

“Our oil holding, APA Corporation (NASDAQ:APA) (+54%) was one of our top contributors in the quarter as oil prices rallied due to tight supplies, which were then exacerbated by the Russian invasion of Ukraine. Although their share prices have increased considerably, both companies still look quite undervalued even using longer term oil prices in the $65-70 dollar range. Meanwhile, if times are good over the next couple of years, we expect these companies to return significant percentages of their market caps to shareholders.”

07. Shell plc (NYSE:SHEL)

Number of Hedge Fund Holders as of Q2, 2022: 39

Shell plc (NYSE:SHEL) is a London-based energy and petrochemical company operating in Europe, Asia, Oceania, Africa, the United States, and the rest of the Americas. The company operates through Integrated Gas, Upstream, Marketing, Chemicals and Products, and Renewables and Energy Solutions segments. Shell plc (NYSE:SHEL) is one of the best energy stocks to invest in. The stock’s dividend yield on October 20 came in at 2.86%.

Shell plc (NYSE:SHEL) is also one of the largest oil companies in the world, as it produces 3.5 million barrels of oil per day and has an equally impressive portfolio of 46,000 gas stations. It also used the recent oil price increases to decrease its debt by 45%. According to experts, Shell plc (NYSE:SHEL) balance sheet is strong and its debt load is reasonable. JPMorgan analyst Christian Malek on October 13 reiterated an Overweight rating on Shell plc (NYSE:SHEL) but lowered the price target on the shares to 2,900 GBp from 3,000 GBp.

According to Insider Monkey’s data, 39 hedge funds were long Shell plc (NYSE:SHEL) at the end of the second quarter of 2022, compared to 37 funds in the prior quarter. Ken Fisher’s Fisher Asset Management held the leading stake in the company, consisting of 20.25 million shares worth over $1 billion.

Here’s what Third Point Management said about Shell plc (NYSE:SHEL) in its Q1 2022 investor letter:

“We have continued to add to our position in Shell, as it trades at the same deeply discounted multiple today that it did last year due to a move up in commodity prices. We are engaged in discussions with management, board members, and other shareholders, as well as informal talks with financial advisors. We have discussed various alternatives with the aim of both increasing shareholder value and allowing Shell to effectively manage the energy transition. We have reiterated our view that Shell’s portfolio of disparate businesses ranging from deep water oil to wind farms to gas stations to chemical plants is confusing and unmanageable. Most investors we have discussed this with agree that the company would be more successful over the long term with a different corporate structure. Discussions among the parties have been constructive and will be ongoing since stakeholders clearly see these corporate changes as instrumental, particularly if Shell wishes to become a leader in the energy transition rather than be left behind as a tarnished legacy brand.

Beyond our discussions around corporate structure, there have been two important developments since our last update. First, Shell announced a plan to redomicile its headquarters to the UK and create a single shareholder class. This move allows greater flexibility to modify its portfolio (either through asset sales or spin-offs) and allows for a more efficient return of capital, specifically via share repurchases. Second, fundamental and geopolitical events have highlighted the strategic importance of reliable energy supplies, especially in Europe. Shell’s LNG business, the largest in the world outside of Qatar, will play a critical role in ensuring energy security for Europe. In our view, the value of this business has increased dramatically since our original investment.

While Shell continues to trade at a large discount to its intrinsic value, with proper management we believe the company can simultaneously deliver shareholder returns, reliable energy and decarbonization of the global economy. We look forward to continued engagement with management and other shareholders and to more strategic clarity from the Company.”

06. Marathon Oil Corporation (NYSE:MRO)

Number of Hedge Fund Holders as of Q2, 2022: 41

Marathon Oil Corporation (NYSE:MRO) is an oil and gas exploration company that engages in the production of crude oil, natural gas, and natural gas liquids. Marathon Oil Corporation (NYSE:MRO) is expected to grow in value by 2022 and is currently trading at a discount. The company has a year-to-date gain of 68.05% and a trailing twelve-month PE ratio of 8.10 as of October 20. Additionally, as of October 20, Marathon Oil Corporation (NYSE:MRO) had $2.35 billion in free cash flows and the company offered a forward dividend yield of 1.13%.

Wall Street analysts see an upside to Marathon Oil Corporation (NYSE:MRO). On October 19, analyst Lloyd Byrne at Jefferies began covering Marathon Oil Corporation (NYSE:MRO) with a Hold rating and a $30 price target. On October 18, Piper Sandler analyst Mark Lear raised his price target on Marathon Oil Corporation (NYSE:MRO) to $38 from $36 and kept an Overweight rating on the shares.

At the end of Q2 2022, 41 hedge funds tracked by Insider Monkey reported owning stakes in Marathon Oil Corporation (NYSE:MRO), down from 43 in the previous quarter. These stakes have a collective value of over $1.26 billion.

Carillon Tower Advisers mentioned Marathon Oil Corporation (NYSE:MRO) in its Q1 2022 investor letter. Here is what the firm has to say:

“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Marathon Oil (NYSE:MRO) increased its quarterly dividend and executed an impressive share buyback that blew by the target it originally announced.”

Click to continue reading and see the 5 Best Crude Oil Stocks To Buy Today.

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Published on May 1, 2024 at by Inan Dogan, PhD

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Published on May 2, 2024 at by Insider Monkey Staff

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