In this article, we discuss 5 cheap oil stocks to buy today. If you want to read our detailed analysis of these stocks, go directly to 10 Cheap Oil Stocks to Buy Today.
5. BP p.l.c. (NYSE:BP)
Number Of Hedge Fund Holders: 27
Share Price as of July 28: $28.47
BP p.l.c. (NYSE:BP) is a London-based energy firm which offers biofuels, natural gas, and de-carbonization solutions and services, along with solar and wind power generation facilities.
On July 20, CGG announced a major multi-year global data transformation and curation agreement with BP p.l.c. (NYSE:BP), that will play a key role in supporting BP’s Subsurface digital strategy. Piper Sandler analyst Ryan Todd raised the price target on BP p.l.c. (NYSE:BP) to $44 from $42 and kept an Overweight rating on the shares. According to the analyst, the setup for the stocks is “increasingly attractive into the quarter on account of recession fears having taken a toll on both refining and integrated oil stocks.
As of the end of the first quarter, 27 out of 900+ elite hedge funds tracked by Insider Monkey held positions in BP p.l.c. (NYSE:BP) with a combined value of $1.86 billion. In comparison, 26 hedge funds held combined stakes worth $1.2 billion in the energy firm a quarter ago. Boston-based investment firm Arrowstreet Capital was the largest shareholder of BP p.l.c. (NYSE:BP) in Q1 2022 with 25.56 million shares valued at more than $751.63 million.
4. Southwestern Energy Company (NYSE:SWN)
Number Of Hedge Fund Holders: 35
Share Price as of July 28: $6.97
Southwestern Energy Company (NYSE:SWN) is a natural gas exploration and production company organized in Delaware and headquartered in Spring, Texas. It engages in the exploration, development, and production of natural gas, oil, and natural gas liquids in the United States, and operates through two segments: Exploration & Production, and Marketing.
On July 21, Citi analyst Paul Diamond upgraded Southwestern Energy Company (NYSE:SWN) to Buy from Neutral with an $8 price target after assuming coverage of the name. The analyst named Southwestern as his top pick among the gas-centric exploration and production companies. According to Diamond, the company’s geographic diversification provides relative operational flexibility, while its “conservative” hedge profile “somewhat constrains the upside.” He expects the company’s leverage and debt targets to be hit well ahead of schedule and sees opportunities for relative outperformance from its operational optionality between Haynesville and Appalachia.
At the end of Q1 2022, 35 hedge funds were bullish on Southwestern Energy Company (NYSE:SWN) and held stakes worth $516.68 million in the company. This is compared to 24 positions in the prior quarter with stakes worth $255.41 million.
Greenlight Capital shared its outlook on Southwestern Energy Company (NYSE:SWN) in its Q1 2022 investor letter. Here is what the firm said:
“SWN is the second largest producer of natural gas in the U.S. The company is well-situated to satisfy growing domestic and export demand. Over the short, medium and long term, Europe now intends to reduce its reliance on Russian energy and increase its use of U.S. LNG. Based on its 2021 year-end reserves – which assumed a $3.60/MMBtu long-term natural gas price – SWN has a PV-104 value of $13.83 per share. By the end of the first quarter, the U.S. natural gas 5-year forward curve averaged $4.28/MMBtu, while international seaborne LNG was close to $20/MMBtu. Over the intermediate term, with the benefit of substantial global investment in infrastructure, we expect prices for U.S. and international natural gas to converge. We acquired our shares at an average price of $6.58. SWN shares ended the quarter at $7.17.”
3. Baker Hughes Company (NASDAQ:BKR)
Number Of Hedge Fund Holders: 39
Share Price as of July 28: $24.98
Baker Hughes Company (NASDAQ:BKR) is an American international industrial service company and one of the world’s largest oil field services companies. The company provides the oil and gas industry with products and services for oil drilling, formation evaluation, completion, production and reservoir consulting.
RBC Capital analyst Keith Mackey lowered the price target on Baker Hughes Company (NASDAQ:BKR) to $36 from $41 but maintained an Outperform rating on the shares on July 21. The company’s Q2 results were below expectations as headwinds in Russia compounded existing supply chain constraints, the analyst tells investors in a research note. Mackey adds, however, that he continues to see long-term value in Baker Hughes Company (NASDAQ:BKR) shares as the LNG cycle progresses and with its oilfield businesses remaining an “important catalyst”.
According to Insider Monkey’s Q1 2022 database, 39 hedge funds reported owning stakes in Baker Hughes Company (NASDAQ:BKR), valued at $936.1 million. In the previous quarter, 35 hedge funds held a $747.8 million worth of stake in the Texas-based company.
Here is what Carillon Eagle Mid Cap Growth Fund has to say about Baker Hughes Company (NASDAQ:BKR) in its Q1 2022 investor letter:
“Baker Hughes (NYSE:BKR), a diversified energy technology and equipment company, is currently seeing a number of tailwinds across its numerous lines of business. In the near term, the company should benefit from the recovery in oil field capital expenditure. In the intermediate term, it also should be able to benefit from the build-out of liquefied natural gas infrastructure to assist European nations in their efforts to reduce their reliance on Russian natural gas. Additionally, Baker Hughes offers carbon capture technologies to help customers meet lofty climate-friendly targets.”
2. Kinder Morgan, Inc. (NYSE:KMI)
Number Of Hedge Fund Holders: 40
Share Price as of July 28: $18.04
Kinder Morgan, Inc. (NYSE:KMI) is one of the largest energy infrastructure companies in North America that specializes in owning and controlling oil and gas pipelines and terminals. It operates through four business segments: Natural Gas Pipelines, Products Pipelines, Terminals, and CO2.
Earlier this April, Wells Fargo analyst Michael Blum upgraded Kinder Morgan, Inc. (NYSE:KMI) to Equal Weight from Underweight with a price target of $21, up from $19, to reflect higher assumed multiples for refined products assets in his sum-of-the-parts valuation. Although the analyst still views Kinder Morgan, Inc. (NYSE:KMI) as a defensive midstream company, he believes the company could benefit from a number of tailwinds on account of surging inflation, oil prices hovering around $100/Bbl, and robust demand for natural gas/LNG.
On July 20, Kinder Morgan, Inc. (NYSE:KMI) announced its financial results for the second fiscal quarter of 2022, posting an EPS of $0.27, in-line with the estimates. The $5.15 billion revenue surpassed market consensus forecasts by $1.27 billion.
At the end of Q1 2022, 40 hedge funds were bullish on Kinder Morgan, Inc. (NYSE:KMI) with stakes worth $1.34 billion. This is compared to 39 positions in the previous quarter with stakes worth $998.85 million. The hedge fund sentiment for the stock is positive.
1. Halliburton Company (NYSE:HAL)
Number Of Hedge Fund Holders: 47
Share Price as of July 28: $28.64
Halliburton Company (NYSE:HAL) is an American multinational corporation that operates as one of the largest oil field service companies, with operations in more than 70 countries. The company exceeded Street forecasts for Q2 EPS and revenue, reporting the largest quarterly profit in about four years as it sold almost the entire equipment inventory in the North American market.
JPMorgan analyst Arun Jayaram sees an attractive risk/reward on Halliburton Company (NYSE:HAL) into the Q2 print on July 5. He sees earnings upside in North America as well as “emerging optionality” to the company’s international footprint and lifted his Q2 and second half of 2022 estimates to reflect a positive view of pricing gains in recent months, while maintaining an Overweight rating on the company’s shares with a $50 price target.
According to the Q1 database of Insider Monkey, 47 hedge funds were bullish on Halliburton Company (NYSE:HAL), up from 43 funds in the earlier quarter. Richard S. Pzena’s Pzena Investment Management featured as the leading stakeholder of the company, with 22.7 million shares worth $862.2 million.
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