3. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 51
Devon Energy Corporation (NYSE:DVN) is an Oklahoma-based independent energy company, primarily engaged in the exploration, development, and production of oil, natural gas, and natural gas liquids in the United States. On November 1, Devon Energy Corporation (NYSE:DVN) posted a Q3 non-GAAP EPS of $2.18 and a revenue of $5.43 billion, outperforming Wall Street estimates by $0.05 and $640 million, respectively. Due to recent acquisitions, Devon Energy Corporation (NYSE:DVN) revised its production forecast higher in the fourth quarter to a range of 640,000 to 660,000 Boe per day, a 6% increase compared to the prior-year quarter.
On November 22, Citi analyst Scott Gruber maintained a Buy rating on Devon Energy Corporation (NYSE:DVN) but trimmed the firm’s price target on the shares to $78 from $80 following the Q3 results.
According to Insider Monkey’s data, 51 hedge funds were bullish on Devon Energy Corporation (NYSE:DVN) at the end of September 2022, compared to 57 funds in the prior quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 10.6 million shares worth about $642 million.
GoodHaven Capital Management released its second-quarter 2022 investor letter and mentioned Devon Energy Corporation (NYSE:DVN). Here is what it said:
“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had a material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is mostly variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”
