In this piece, we will take a look at the 15 best oil stocks to buy according to hedge funds. For more oil stocks, head on over to 5 Best Oil Stocks To Buy According To Hedge Funds.
The oil and gas industry is one of the most important and lucrative sectors in the world. This is simply due to the nature of the product itself, with the marvels of internal combustion ensuring that whether it’s transportation or power generation, some of the most crucial sectors of the global economy remain dependent on fossil fuels.
Naturally, this criticality within the global economy also lends the industry some high valuations. For instance, a research report from Maximize Market Research outlines that the global crude oil market was worth $1.3 trillion in 2021 and from then until 2029 it will grow at a compounded annual growth rate (CAGR) of 1.8% to be worth an estimated $1.6 trillion by the end of the forecast period. The research firm believes that growth in the global population along with developments in the petrochemical and agricultural sectors will drive the industry forward. It adds that both Asia and North America will outpace the broader industry in terms of growth since the pair will each exhibit a 1.9% CAGR.
Right now, the crude oil industry is battling to figure out what impact a Chinese economic recovery will have on the industry. Investment bank The Goldman Sachs Group, Inc. (NYSE:GS) believes that while oil prices will increase to $100 per barrel, this will only happen in December this year due to higher supplies from the U.S. and Russia, longer winters, and a Chinese reopening. Morgan Stanley (NYSE:MS), on the other hand, believes that oil demand this year can grow by a whopping 36%, based almost entirely on Chinese strength.
Today, we’ll take a look at which oil companies are popular with hedge funds, with the top picks being Occidental Petroleum Corporation (NYSE:OXY), Schlumberger Limited (NYSE:SLB), and Exxon Mobil Corporation (NYSE:XOM).
Photo by David Thielen on Unsplash
Our Methodology
We used Insider Monkey’s collection of 943 hedge fund portfolios to determine which oil companies they had invested in as of the fourth quarter of last year.
Best Oil Stocks To Buy According To Hedge Funds
15. EOG Resources, Inc. (NYSE:EOG)
Number of Hedge Fund Holders in Q4 2022: 50
EOG Resources, Inc. (NYSE:EOG) produces and sells crude oil and natural gas. The firm has billions of barrels of oil equivalent reserves and it is headquartered in Houston, Texas.
EOG Resources, Inc. (NYSE:EOG) is performing strongly as of late, with its total shareholder return of 26% over the past twelve months being significantly higher than its annualized return of 8% over the past decade. Insider Monkey’s 943 hedge fund survey for last year’s fourth quarter outlined that 50 had held a stake in the company.
EOG Resources, Inc. (NYSE:EOG)’s largest investor is Natixis Global Asset Management’s Harris Associates which owns 6.1 million shares that are worth $792 million.
Along with Schlumberger Limited (NYSE:SLB), Occidental Petroleum Corporation (NYSE:OXY), and Exxon Mobil Corporation (NYSE:XOM), EOG Resources, Inc. (NYSE:EOG) is a stock that was on the hedge fund radar last quarter.
14. Halliburton Company (NYSE:HAL)
Number of Hedge Fund Holders in Q4 2022: 50
Halliburton Company (NYSE:HAL) is an oil and gas equipment company that provides products such as well completion tools, hydraulic equipment, and downhole tools. It is based in Houston, Texas.
Halliburton Company (NYSE:HAL) benefited from the surging interest in oil and gas exploration all over the world last year as its revenues grew by 33% annually by the end of 2022 to stand at $20.3 billion. Insider Monkey took a look at 943 hedge funds for their Q4 2022 holdings to determine that 50 had invested in the firm.
Out of these, Richard S. Pzena’s Pzena Investment Management is Halliburton Company (NYSE:HAL)’s largest shareholder. It owns 7.8 million shares that are worth $310 million.
13. Diamondback Energy, Inc. (NASDAQ:FANG)
Number of Hedge Fund Holders in Q4 2022: 52
Diamondback Energy, Inc. (NASDAQ:FANG) is an American oil company that primarily focuses on developing sites and producing oil and gas from them in Texas. The firm has almost two billion barrels of oil equivalent reserves and it is headquartered in Midland, Texas.
Diamondback Energy, Inc. (NASDAQ:FANG) beat its oil production estimates for 2022 as it churned out more than 223,000 barrels of black gold per day last year, with management attributing the achievement to smooth well completion and strong well performance. After looking at 943 hedge fund portfolios for last year’s December quarter, Insider Monkey found out that 52 had invested in Diamondback Energy, Inc. (NASDAQ:FANG).
Donald Yacktman’s Yacktman Asset Management is Diamondback Energy, Inc. (NASDAQ:FANG)’s largest investor. It owns 1.3 million shares that are worth $180 million.
12. Marathon Petroleum Corporation (NYSE:MPC)
Number of Hedge Fund Holders in Q4 2022: 52
Marathon Petroleum Corporation (NYSE:MPC) is an oil refining and marketing company. It has refineries all over the U.S., through which it processes fuels such as ethanol, heavy fuel, and gasoline. The company is based in Findlay, Ohio.
Marathon Petroleum Corporation (NYSE:MPC) encountered some problems at its refinery in El Paso, Texas in February 2023 when the facility faced fluctuating voltage due to problems with the local power grid. By the end of 2022’s fourth quarter, 52 of the 943 hedge funds part of Insider Monkey’s research had invested in the firm.
Marathon Petroleum Corporation (NYSE:MPC)’s largest investor is Paul Singer’s Elliott Management which owns 11 million shares that are worth $1.2 billion.
11. Antero Resources Corporation (NYSE:AR)
Number of Hedge Fund Holders in Q4 2022: 53
Antero Resources Corporation (NYSE:AR) is an oil and gas company headquartered in Denver, Colorado. The firm explores and produces crude oil, gas, and natural gas liquids, alongside transporting these fuels to refineries and other facilities.
Antero Resources Corporation (NYSE:AR) came out with some good news for investors in February 2023, as it shared that despite the recent fall in natural gas prices, it is well positioned to benefit from them since it earns most of its revenue from liquids and sells gas outside the region in which it produces it. After digging through 943 hedge funds for Q4 2022, Insider Monkey discovered that 53 had held a stake in Antero Resources Corporation (NYSE:AR) .
Out of these, D.E. Shaw’s D E Shaw is Antero Resources Corporation (NYSE:AR)’s investor with a $3.2 million stake that comes via 3.2 million shares.
10. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders in Q4 2022: 55
Devon Energy Corporation (NYSE:DVN) is an oil and gas producer with operations primarily focused on the U.S. The firm is headquartered in Oklahoma City, Oklahoma.
Devon Energy Corporation (NYSE:DVN) is facing some tough love from Wall Street after it posted disappointing earnings in February 2023. Analysts across the board have cut the firm’s share price target, and Truist, which reduced it to $70 from $80, believes that the firm’s wells will still trend upward this year. 55 of the 943 hedge funds polled by Insider Monkey for their December quarter of 2022 had invested in the company.
Devon Energy Corporation (NYSE:DVN)’s largest investor is Ken Fisher’s Fisher Asset Management which owns 4.4 million shares that are worth $271 million.
9. Pioneer Natural Resources Company (NYSE:PXD)
Number of Hedge Fund Holders in Q4 2022: 55
Pioneer Natural Resources Company (NYSE:PXD) produces oil, gas, and natural gas liquids. Its operations are focused in Texas and the firm has more than 100 million barrels of reserves.
Pioneer Natural Resources Company (NYSE:PXD) beat Wall Street estimates for its fourth quarter EPS, as it posted $5.91 per share for the metric in February 2023 while analysts had estimated $5.77 per share. By the end of Q4 2022, 55 of the 943 hedge funds studied by Insider Monkey had held a stake in the firm.
Pioneer Natural Resources Company (NYSE:PXD)’s largest shareholder in our database is Donald Yacktman’s Yacktman Asset Management which owns 724,827 shares that are worth $165 million.
8. EQT Corporation (NYSE:EQT)
Number of Hedge Fund Holders in Q4 2022: 56
EQT Corporation (NYSE:EQT) is a dedicated natural gas production company that is headquartered in Pittsburgh, Pennsylvania. The firm has trillions of cubic feet of proven natural gas and petroleum reserves.
EQT Corporation (NYSE:EQT) pitched in to aid Ukraine’s ongoing efforts to defend against a Russian invasion by donating production equipment to Ukraine’s largest natural gas producer. As part of their investments for last year’s fourth quarter, 56 of the 920 hedge funds polled by Insider Monkey had bought the firm’s shares.
EQT Corporation (NYSE:EQT)’s largest hedge fund investor is Eric W. Mandelblatt’s Soroban Capital Partners which owns 6.4 million shares that are worth $218 million.
7. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders in Q4 2022: 57
Chevron Corporation (NYSE:CVX) is a diversified oil and gas company that is also one of the largest of its kind in the world. The firm has operations from the oil well to the pump and a presence all over the globe.
Chevron Corporation (NYSE:CVX) expanded its Middle Eastern operations in February 2023 when it entered into an agreement with the Egyptian government to share information on emissions management. 57 of the 943 hedge funds polled by Insider Monkey for their December quarter of 2022 had held a stake in the oil giant.
Warren Buffett’s Berkshire Hathaway is Chevron Corporation (NYSE:CVX)’s largest shareholder. It owns 162 million shares that are worth $29 billion.
6. Chesapeake Energy Corporation (NYSE:CHK)
Number of Hedge Fund Holders in Q4 2022: 58
Chesapeake Energy Corporation (NYSE:CHK) is an oil and gas production company with operations in Texas, Pennsylvania, and Louisiana. The firm is headquartered in Oklahoma City, Oklahoma.
Chesapeake Energy Corporation (NYSE:CHK) is planning to reduce its natural gas production in the U.S. as prices have dropped and margins are dropping. Insider Monkey’s Q4 2022 research covering 943 hedge funds outlined that 58 had bought the firm’s shares.
Chesapeake Energy Corporation (NYSE:CHK)’s largest investor is Howard Marks’ Oaktree Capital Management which owns 8.6 million shares that are worth $814 million.
Occidental Petroleum Corporation (NYSE:OXY), Schlumberger Limited (NYSE:SLB), Chesapeake Energy Corporation (NYSE:CHK), and Exxon Mobil Corporation (NYSE:XOM) are some oil stocks that hedge funds are piling into.
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Disclosure: None. 15 Best Oil Stocks To Buy According To Hedge Funds is originally published on Insider Monkey.
