In this article we discuss the 5 best oil and energy stocks to buy now. If you want to read our detailed analysis of the oil and energy industry, go directly to 10 Best Oil and Energy Stocks To Buy Now.
5. China Petroleum & Chemical Corporation (NYSE: SNP)
Number of Hedge Fund Holders: 13
China Petroleum, also Sinopec, is one of the biggest energy companies in the world operating in the oil refinery, gas and petrochemicals business. The company operates various segments, including Exploration and Development, Refining, Marketing and Distribution, Chemicals and Corporate. In March 23, the company entered into an agreement with Qatar after which the Arab country will buy 2 million tons per year of liquefied natural gas from the company for 10 years.
Jim Simons’ Renaissance Technologies is one of the 13 hedge funds tracked by Insider Monkey having stakes in SNP at the end of the fourth quarter. The fund owns over 3.1 million shares of the company.
4. Euronav NV (NYSE: EURN)
Number of Hedge Fund Holders: 14
Euronav is a Belgium-based company that provides storage and transportation services for oil products. The stock is currently down amid OPEC’s decision to keep the production levels unchanged. However, the company is an attractive risk/reward option in the oil tanker market. The company finished the most recent quarter with $1.2 billion liquidity and $162 million in cash. The company also posted $18.5 million in share buybacks. The company is also a reliable dividend payer, with a policy of returning 80% of net income to shareholders.
As of the end of the fourth quarter of 2020, Renaissance Technologies owns 2.2. million shares of EURN worth $17.6 million. EUNR accounts for 0.01% of Renaissance’s total portfolio.
3. Bonanza Creek Energy, Inc. (NYSE: BCEI)
Number of Hedge Fund Holders: 17
Denver, Colorado-based Bonanza Creek ranks 3rd on the list of 10 best oil and energy stocks to buy now. The stock has gained a whopping 157% over the last 12 months. The company explores and manages onshore oil and associated liquids-rich natural gas in the United States. In its guidance for the fourth quarter, the company said it expects its quarterly lease operating expenses to decline by 27% on a year-over-year basis.
Mangrove Partners currently holds 388,506 shares of BCEI that amounts $7.5 million. BCEI occupies 1.02% of Mangrove Partners’ total portfolio.
2. Magellan Midstream Partners, L.P. (NYSE: MMP)
Number of Hedge Fund Holders: 22
Tulsa, Oklahoma-based Magellan ranks 2nd on the list of 10 best oil and energy stocks to buy now. The company operates ammonia and petroleum pipelines. It has over 80 petroleum products terminals. The stock has gained over 31% over the last 12 months. The company recently posted a decent quarter and said it expects a recovery in the first half of 2021.
The company is also getting the attention of the smart money, as 22 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the fourth quarter, up from 20 funds a quarter earlier.
1. Diamondback Energy, Inc. (NASDAQ: FANG)
Number of Hedge Fund Holders: 34
Diamondback Energy is one of the biggest energy companies in the U.S. It ranks 1st on the list of 10 best oil and energy stocks to buy now. The company has 1,316 million barrels of oil equivalent of estimated proved reserves. The stock has gained 2013% over the last 12 months.
According to our database, the number of FANG’s long hedge funds positions increased at the end of the fourth quarter of 2020. There were 34 hedge funds that hold a position in FANG compared to 23 funds in the third quarter. The biggest stakeholder of the company is Harris Associates, with 3.28 million shares, worth $158.8 million.
Miller Value Partners, in their Q4 2020 investor letter, said Diamondback Energy, Inc. (NASDAQ: FANG) was added in their portfolio in the fourth quarter of 2020. Here is what Miller Value Partners has to say about Diamondback Energy, Inc. in their Q4 2020 investor letter:
“We also bought Diamondback Energy. For the first time in decades, we find energy to be quite attractive. Companies are finally focusing on cash flow and returns. Diamondback is a low-cost shale producer that screened well on a number of metrics we pay attention to (dividend yield, free cash flow yield, discounted cash flow, and insider buying). They recently added ROIC to their management incentive compensation. They plan to continue to pay down debt and maintain the dividend. The company is obviously levered to increasing oil prices.”
You can also take a peek at Billionaire Jim Simons’ Top 10 Stock Picks and Billionaire Steve Cohen’s Top 10 Stock Picks.
