5 Best Undervalued Energy Stocks to Buy

4. ConocoPhillips (NYSE:COP)

Number of Hedge Fund Holders: 64

PE Ratio as of December 2: 8.78

On November 3, ConocoPhillips (NYSE:COP) posted market-beating earnings for the third quarter of fiscal 2022. The company reported an EPS of $3.60 and outperformed consensus by $0.16. The company’s revenue for the quarter amounted to $21.61 billion, up 86.07% year over year and ahead of Wall Street consensus by $3.38 billion. As of December 2, ConocoPhillips (NYSE:COP) is trading at a PE multiple of 8x and is one of the best undervalued energy stocks to buy now.

This November, Argus analyst Bill Selesky raised his price target on ConocoPhillips (NYSE:COP) to $150 from $125 and reiterated a Buy rating on the shares. On November 22, Citi analyst Alastair Syme raised his price target on ConocoPhillips (NYSE:COP) to $160 from $132 and maintained a Buy rating on the shares.

At the end of Q3 2022, 64 hedge funds were long ConocoPhillips (NYSE:COP) and disclosed positions worth $2.66 billion. This is compared to 71 hedge funds in the preceding quarter with stakes worth $2.42 billion. As of September 30, Fisher Asset Management is the top investor in the company and has a position worth $708.5 million.

Here is what ClearBridge Investments had to say about ConocoPhillips (NYSE:COP) in its third-quarter 2022 investor letter:

“ConocoPhillips (NYSE:COP) handily outperformed the energy sector, which led the value benchmark. Its exposure to natural gas helped the stock perform more in line with natural gas E&Ps, which led the sector due to the European energy crisis and U.S. shale gas being considered a secure long-term source of liquid natural gas. In addition to COP’s low-cost resource base, conservative balance sheet and experienced management team, we appreciate its strong focus on ESG measures, which we believe is a good indicator of the quality of a company’s business model and management team.

Specifically, we appreciate solid governance practices with compensation metrics emphasizing ROCE and relative total shareholder return, the board’s effective oversight of management as well as the company’s methane flaring leadership. COP is investing in field electrification and carbon capture across its portfolio, with ambitions to deliver oil production with a CO2 intensity of sub-5 kg/BOE, which would be one of the lowest emission sources of supply in the world.”