In this piece, we will take a look at the ten energy stocks to buy according to billionaire David Harding.
David Harding is a British hedge fund investor who was born in the United Kingdom. He is currently serving as the chief executive officer of the hedge fund Winton Capital Management, which is also a British hedge fund that is headquartered in London, England.
Prior to setting up his hedge fund, Mr. Harding gained some experience in the finance industry. He is an alumnus of the University of Cambridge, where he studied natural sciences and graduated in 1982 to begin a five year career in finance which would then see him set up his own hedge fund. Immediately after graduating, Mr. Harding would begin an internship at a stockbroker, and after two years he would join another brokerage firm as a commodities trader.
He continued to work in the commodities trading industry until 1987, and during this time period, Mr. Harding would focus his attention on quantitative trading models, which was a new and budding field at the time. His first experience in setting up a hedge fund would come in 1987, when he founded the fund Adam, Harding & Lueck (AHL).
12 years later this fund would be purchased by another fund and Mr. Harding would go on to become the parent fund’s head of quantitative research, a role that would cement his prowess in the field. However, working in a large company would not suit his interests, and in 1995 David Harding set up his own hedge fund, Winton Capital with $1.6 million in assets.
Harding is one of the most charitable executives in the hedge fund industry. For instance, he donated a whopping £1 million to Cambridge University in 2019, allowing him to become the first individual in British history to do so. He also opposes taxes on the hedge fund industry, a preference that has seen him ally himself with the Conservative Party. Undoubtedly, the recent tax cuts by the British Chancellor of Exchequer Mr. Kwasi Kwarteng should have pleased Mr. Harding as well, despite sending the U.K. bond market and the British Pound in a tailspin to new record lows in British history.
Winton Capital managed a $1.8 billion portfolio as of this year’s second quarter, and some top energy stock picks in this portfolio are Exxon Mobil Corporation (NYSE:XOM), Evergy, Inc. (NYSE:EVRG), and Constellation Energy Corporation (NASDAQ:CEG).
David Harding of Winton Capital Management
Our Methodology
To pick out Mr. Harding’s top energy stock picks, we sifted through his firm’s filings with U.S. regulators for this year’s June quarter. The companies were then analyzed through hedge fund sentiment courtesy of Insider Monkey’s Q2 2022 895 hedge fund survey.
10 Energy Stocks to Buy According to Billionaire David Harding
10. Duke Energy Corporation (NYSE:DUK)
Winton Capital’s Stake Value: $4.6 million
Percentage of Winton Capital’s 13F Portfolio: 0.24%
Number of Hedge Fund Holders: 30
Duke Energy Corporation (NYSE:DUK) is an American energy company that is headquartered in Charlotte, North Carolina. The firm sells electricity to millions of customers in the United States, and it has more than 50,000 MW of electricity in its portfolio. Additionally, the firm also has gas storage and transmission facilities.
Duke Energy Corporation (NYSE:DUK)’s shares have fallen by a modest 5% year to date, which has led the stock to outperform major indexes that have seen their values drop by more than 20% with Wall Street having entered bear territory in the wake of aggressive interest rate action by the Federal Reserve. Credit Suisse increased the company’s share price target to $114 from $112 in August 2022.
Winton Capital owned 43,193 Duke Energy Corporation (NYSE:DUK) shares as part of its Q2 2022 portfolio, allowing it to hold a $4.6 million stake in the company. For the same time period, 30 of the 895 hedge funds part of Insider Monkey’s portfolio had also invested in the firm.
Duke Energy Corporation (NYSE:DUK)’s largest investor is Jim Simons’s Renaissance Technologies which owns one million shares that are worth $116 million.
Exxon Mobil Corporation (NYSE:XOM), Evergy, Inc. (NYSE:EVRG), and Constellation Energy Corporation (NASDAQ:CEG) are met by Duke Energy Corporation (NYSE:DUK) in the list of Winton Capital’s top energy stock picks.
9. Xcel Energy Inc. (NASDAQ:XEL)
Winton Capital’s Stake Value: $4.7 million
Percentage of Winton Capital’s 13F Portfolio: 0.25%
Number of Hedge Fund Holders: 26
Xcel Energy Inc. (NASDAQ:XEL) is an energy company that engages in the purchase and selling of electricity and natural gas. The firm generates electricity through several sources such as coal and renewables, and it also transports and sells natural gas to retail customers. It is headquartered in Minneapolis, Minnesota, the United States.
Mr. Harding’s Winton Capital held a $4.7 million stake in Xcel Energy Inc. (NASDAQ:XEL) as this year’s June quarter came to an end. This came through 67,128 shares and it represented 0.25% of the firm’s investment portfolio. Insider Monkey’s 895 hedge fund portfolio for this year’s second quarter saw 26 investors in the company.
Xcel Energy Inc. (NASDAQ:XEL)’s revenue grew by an impressive 16.5% during the end of its latest fiscal year, and its cash flow growth was even more impressive as it stood at 23.1%. The firm also has a long term renewable energy transition in place, through which it plans to generate 80% of its electricity through renewable sources in Colorado by 2030.
Xcel Energy Inc. (NASDAQ:XEL)’s largest investor in our database is Greg Poole’s Echo Street Capital Management which owns 1.7 million shares that are worth $122 million.
Aristotle Capital Management mentioned the company in its Q2 2022 investor letter. Here is what the fund said:
“Xcel Energy owns and operates four utilities serving 3.7 million electric customers and 2.1 million natural gas customers in eight states. Headquartered in Minneapolis, Minnesota, the firm generates $11.5 billion in annual revenue and owns infrastructure that ranges from nuclear power plants to wind farms.
The company has been a leader in renewable energy development among regulated utilities. At the end of 2020, 47% of the energy Xcel produced came from carbon-free sources, making it one of the foremost wind producers and renewable energy providers in the U.S. It was also an early mover to announce (in December 2018) a 100% carbon free goal by 2050. The company plans to invest $26 billion in 2022-26, much of it going to renewable energy projects and electric grid infrastructure to support clean energy.
8. OGE Energy Corp. (NYSE:OGE)
Winton Capital’s Stake Value: $4.8 million
Percentage of Winton Capital’s 13F Portfolio: 0.25%
Number of Hedge Fund Holders: 13
OGE Energy Corp. (NYSE:OGE) is an electricity provider that is headquartered in Oklahoma City, Oklahoma, the United States. The firm has thousands of megawatts of electricity supply and thousands of miles of electricity lines all over the U.S. and it serves close to a million customers.
OGE Energy Corp. (NYSE:OGE) is one of the strongest dividend paying stocks in the industry, as it pays out a dividend of 41 cents per share for a strong 4.3% yield. While broader markets have fallen throughout this year, OGE Energy Corp. (NYSE:OGE)’s shares have grown by a modest 0.25%, indicating investor confidence.
Winton Capital owned 124,971 OGE Energy Corp. (NYSE:OGE) shares as part of its June quarter of 2022 investments, allowing it to hold a $4.8 million stake in the company. Insider Monkey’s Q2 2022 survey of 895 hedge funds revealed that 13 had also held a stake in the company.
OGE Energy Corp. (NYSE:OGE)’s largest investor in our database is Stuart J. Zimmer’s Zimmer Partners which owns 2.8 million shares that are worth $110 million.
7. CMS Energy Corporation (NYSE:CMS)
Winton Capital’s Stake Value: $4.8 million
Percentage of Winton Capital’s 13F Portfolio: 0.25%
Number of Hedge Fund Holders: 22
CMS Energy Corporation (NYSE:CMS) is an energy company that provides both electricity and gas to customers in the American state of Michigan. The firm has close to 100,000 miles of electricity distribution lines, and millions of residential and commercial customers of electricity and gas.
Mr. Harding’s hedge fund held a $4.8 million stake in CMS Energy Corporation (NYSE:CMS) during Q2 2022, which came through 71,847 shares and represented 0.25% of its investment portfolio. Insider Monkey took a look at 895 hedge funds’ portfolios for the same time period to discover that 22 had bought the company’s shares.
CMS Energy Corporation (NYSE:CMS)’s business model of targeting both electricity and gas lends it a unique advantage through which it is hedged against seasonal variations to demand. The company also plans to grow its rate base by 7% annually from 2021 to 2026 for a $26 billion rate base by 2026 end. Barclays reduced CMS Energy Corporation (NYSE:CMS)’s share price target to $72 from $76 in August 2022, stating that a multiples reduction for the broader industry influenced the decision.
CMS Energy Corporation (NYSE:CMS)’s largest investor is Greg Poole’s Echo Street Capital Management which owns 1.9 million shares that are worth $130 million.
6. Ameren Corporation (NYSE:AEE)
Winton Capital’s Stake Value: $5.5 million
Percentage of Winton Capital’s 13F Portfolio: 0.29%
Number of Hedge Fund Holders: 23
Ameren Corporation (NYSE:AEE) is one of the oldest public utility companies in the U.S. as it was founded in 1881 and is headquartered in St. Louis, Missouri. The firm generates electricity through coal, hydro, and other sources, and it is a rate regulated electricity and gas provider.
Ameren Corporation (NYSE:AEE)’s strong capital investments have let it slowly grow its rate base which in turn contributed to the company growing its earnings per share by 6.59% to $0.97 by the end of this year’s first quarter. The company also pays a 59 cent dividend for a 2.77% yield. BMO Capital raised its share price target to $103 from $98 in September 2022, stating that it is positive about the long term growth opportunities for the firm.
Winton Capital owned 61,380 Ameren Corporation (NYSE:AEE) shares for its second quarter of 2022 portfolio. This allowed it to hold a $5.5 million stake in the company which represented 0.29% of its investment portfolio. For the same time period, 23 of the 895 hedge funds surveyed by Insider Monkey had invested in the firm.
Ameren Corporation (NYSE:AEE)’s largest investor in our database is Israel Englander’s Millennium Management which owns 1.1 million shares that are worth $103 million.
Along with Evergy, Inc. (NYSE:EVRG), Exxon Mobil Corporation (NYSE:XOM), and Constellation Energy Corporation (NASDAQ:CEG), Ameren Corporation (NYSE:AEE) is a top David Harding stock pick.
5. FirstEnergy Corp. (NYSE:FE)
Winton Capital’s Stake Value: $5.8 million
Percentage of Winton Capital’s 13F Portfolio: 0.3%
Number of Hedge Fund Holders: 42
FirstEnergy Corp. (NYSE:FE) is an American electricity transmitter and generator that is headquartered in Akron, Ohio. The firm owns electricity generation facilities that utilize coal, renewable, and other sources and it transmits this electricity to close to six million customers.
Winton Capital owned a $5.8 million stake in FirstEnergy Corp. (NYSE:FE) as part of its Q2 2022 portfolio. This came through the hedge fund holding 151,533 shares of the energy company. For the same time period, 42 out of the 895 hedge funds polled by Insider Monkey had invested in the firm.
FirstEnergy Corp. (NYSE:FE) has been growing profitability over the course of the past five years, as it reversed a loss of $289 million in 2017 to a profit of $1.24 billion last year. Its revenue of $2.82 billion for this year’s first half also grew over the same time period last year. Morgan Stanley kept a $53 share price target for FirstEnergy Corp. (NYSE:FE) in September 2022, citing optimism about recent management changes.
FirstEnergy Corp. (NYSE:FE)’s largest investor in our database is Carl Icahn’s Icahn Capital LP which owns 18 million shares that are worth $728 million.
4. Southwestern Energy Company (NYSE:SWN)
Winton Capital’s Stake Value: $5.9 million
Percentage of Winton Capital’s 13F Portfolio: 0.31%
Number of Hedge Fund Holders: 47
Southwestern Energy Company (NYSE:SWN) is an oil, natural gas, and natural gas liquid explorer in the United States. The company has exploration sites in several U.S. states and access to billions of cubic feet of natural gas reserves. It is headquartered in Spring, Texas.
Southwestern Energy Company (NYSE:SWN)’s share price has grown by a strong 29% year to date, in stark comparison to indexes such as the New York Stock Exchange which has seen its value drop by an eye watering 21%. Its latest quarter saw the firm bring in $4 billion in revenue. Citi raised the company’s share price target to $10 from $8 in September 2022, stating that the firm will benefit from a strong operating environment in the coming quarters.
Mr. Harding’s hedge fund held a $5.9 million stake in Southwestern Energy Company (NYSE:SWN) as part of its investment portfolio for this year’s June quarter. Insider Monkey’s Q2 2022 survey of 895 funds saw 47 as having invested in the company.
Jim Simons’s Renaissance Technologies is Southwestern Energy Company (NYSE:SWN)’s largest investor. It owns 33 million shares that are worth $210 million.
3. Exxon Mobil Corporation (NYSE:XOM)
Winton Capital’s Stake Value: $6.5 million
Percentage of Winton Capital’s 13F Portfolio: 0.34%
Number of Hedge Fund Holders: 72
Exxon Mobil Corporation (NYSE:XOM) is one of the world’s largest oil and gas companies, and it operates more than 20,000 wells all over the globe. Exxon Mobil Corporation (NYSE:XOM) is headquartered in Irving, Texas, the United States.
Winton Capital’s Q2 2022 investment portfolio revealed that the firm had held 76,613 Exxon Mobil Corporation (NYSE:XOM) shares. These were worth $6.5 million and they represented 0.34% of its investment portfolio. For the same time period, 72 out of the 895 hedge funds had also bought Exxon Mobil Corporation (NYSE:XOM)’s shares.
Exxon Mobil Corporation (NYSE:XOM) has heavily invested in its future. These investments can insulate the firm from fears of a downturn in oil prices. It aims to grow its production capacity from its Guyana site to 1 billion barrels per day by 2026, and its Payara facility is expected to come online next year.
Exxon Mobil Corporation (NYSE:XOM)’s largest investor in our database is Rajiv Jain’s GQG Partners which owns 47 million shares that are worth $4 billion.
2. Evergy, Inc. (NYSE:EVRG)
Winton Capital’s Stake Value: $7 million
Percentage of Winton Capital’s 13F Portfolio: 0.37%
Number of Hedge Fund Holders: 22
Evergy, Inc. (NYSE:EVRG) is an electricity generator and distributor in the U.S. The company supplies electricity to customers in Kansas and Missouri, and it has close to 1.6 million customers. It is headquartered in Kansas City, Missouri.
Evergy, Inc. (NYSE:EVRG) has a strong emissions free power generation portfolio, which sees it generate 56% of its electricity from non carbon sources such as uranium. The firm has beat analyst EPS estimates for the past six quarters and it aims to add another 3,500 megawatts of renewable energy to its portfolio by 2032.
Winton Capital’s Q2 2022 stake in Evergy, Inc. (NYSE:EVRG) was worth $7 million and it came through the firm owning 108,239 million shares of the company. Insider Monkey took a look at 895 hedge fund portfolios for this year’s June quarter to discover that 22 had also held a stake in the company.
Out of these, Evergy, Inc. (NYSE:EVRG)’s largest investor is Ken Griffin’s Citadel Investment Group which owns 1.6 million shares that are worth $104 million.
1. Constellation Energy Corporation (NASDAQ:CEG)
Winton Capital’s Stake Value: $10.9 million
Percentage of Winton Capital’s 13F Portfolio: 0.57%
Number of Hedge Fund Holders: 43
Constellation Energy Corporation (NASDAQ:CEG) is another American electricity company. The firm generates and sells electricity in several American regions and its portfolio has more than 32,000 megawatts of power capacity. Constellation Energy Corporation (NASDAQ:CEG) is headquartered in Baltimore, Maryland.
Mr. Harding’s hedge fund owned 190,602 Constellation Energy Corporation (NASDAQ:CEG) shares during this year’s second quarter, for a $10.9 million stake that represented 0.57% of the firm’s portfolio. Insider Monkey’s Q2 2022 survey of 895 hedge funds saw 43 investors in the company.
Constellation Energy Corporation (NASDAQ:CEG)’s shares have rallied by an outstanding 98% this year, which has undoubtedly made Mr. Harding quite happy – especially since the firm is his largest energy holding. In a major development, the firm announced in September 2022 that its nuclear plants ran at 100% capacity this summer and did not experience any supply constraints. Morgan Stanley increased the company’s share price target to $95 from $64 in August 2022, stating that the company’s operating income is not risky.
Constellation Energy Corporation (NASDAQ:CEG)’s largest investor is John Smith Clark’s Southpoint Capital Advisors which owns 3 million shares that are worth $171 million.
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Disclosure: None. 10 Energy Stocks to Buy According to Billionaire David Harding is originally published on Insider Monkey.
