5 Hot Oil Stocks To Buy Now

In this article, we discuss 5 hot oil stocks to buy now. If you want to see more stocks in this selection, check out 10 Hot Oil Stocks To Buy Now. 

5. Devon Energy Corporation (NYSE:DVN)

Average 3-month Volume as of January 31: 9.39 Million

YTD Share Price Gains as of January 31: 7.26%

Number of Hedge Fund Holders: 51

Devon Energy Corporation (NYSE:DVN) is an independent energy company, primarily engaged in the exploration, development, and production of oil, natural gas, and natural gas liquids in the United States. On January 24, Wells Fargo analyst Roger Read initiated coverage of Devon Energy Corporation (NYSE:DVN) with an Equal Weight rating and a $70 price target. In a research note to investors, the analyst mentioned that Devon Energy Corporation (NYSE:DVN)’s recent acquisitions and resource base support its aim of up to 5% yearly production growth. However, the neutral rating reflects the market’s perception of the stock’s recent performance. Wells Fargo would also prefer if more of Devon Energy Corporation (NYSE:DVN)’s free cash flow was directed towards its share repurchase program to enhance per share metrics over time. It is one of the hot oil stocks to monitor. 

According to Insider Monkey’s data, Devon Energy Corporation (NYSE:DVN) was part of 51 hedge fund portfolios at the end of September 2022, compared to 57 in the earlier quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 10.6 million shares worth $642 million. 

In its Q2 2022 investor letter, GoodHeaven Capital Management, an asset management firm, highlighted a few stocks and Devon Energy Corporation (NYSE:DVN) was one of them. Here is what the fund 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 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 led 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 most 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.”

4. Marathon Oil Corporation (NYSE:MRO)

Average 3-month Volume as of January 31: 10.63 Million

YTD Share Price Gains as of January 31: 5.66%

Number of Hedge Fund Holders: 50

Marathon Oil Corporation (NYSE:MRO) was founded in 1887 and is headquartered in Houston, Texas. It operates as an independent exploration and production company in the United States and internationally. The company engages in the exploration, production, and marketing of crude oil and condensate, natural gas liquids, and natural gas. Marathon Oil Corporation (NYSE:MRO) on January 25 declared a $0.10 per share quarterly dividend, an 11.1% increase from its prior dividend of $0.09. The dividend is payable on March 10, to shareholders of record on February 15. 

On January 24, Morgan Stanley analyst Devin McDermott upgraded Marathon Oil Corporation (NYSE:MRO) to Overweight from Equal Weight and lifted the price target to $28 from $27. In a research note to investors, the analyst explained that the recent acquisition of Ensign Natural Resources in the Eagle Ford added 130,000 acres to Marathon Oil Corporation (NYSE:MRO)’s holdings with over 600 untapped locations, addressing investor concerns about the company’s inventory longevity. 

According to Insider Monkey’s third quarter database, 50 hedge funds were long Marathon Oil Corporation (NYSE:MRO), compared to 41 in the prior quarter. Ken Fisher’s Fisher Asset Management is the leading stakeholder of the company, with 8.3 million shares worth $188 million. 

Here is what Carillon Tower Advisers had to say about Marathon Oil Corporation (NYSE:MRO) in its “Carillon Clarivest Capital Appreciation Fund” first-quarter 2022 investor letter:

“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Marathon Oil (NYSE:MRO) increased its quarterly dividend and executed an impressive share buyback that blew by the target it originally announced.”

3. Occidental Petroleum Corporation (NYSE:OXY)

Average 3-month Volume as of January 31: 12.53 Million

YTD Share Price Gains as of January 31: 5.05%

Number of Hedge Fund Holders: 74

Occidental Petroleum Corporation (NYSE:OXY) is a Texas-based company that engages in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, Africa, and Latin America. It operates through three segments – Oil and Gas, Chemical, and Midstream and Marketing. On December 31, Occidental Petroleum Corporation (NYSE:OXY) was one of the the top two percentage gainers on the S&P 500 and the company saw its shares more than double in value. 

On January 9, Mizuho analyst Nitin Kumar assumed coverage of Occidental Petroleum Corporation (NYSE:OXY) with a Buy rating with a price target of $82, up from $81. The analyst stated that Occidental Petroleum Corporation (NYSE:OXY) should be compared to InterOil and offshore peers instead of larger independent E&Ps. He also mentioned that Occidental Petroleum Corporation (NYSE:OXY)’s lower sustained capital expenses and extensive reserve base can help it balance cash flow priorities that include growth projects, debt reduction, and equity shareholder returns.

According to Insider Monkey’s data, 74 hedge funds were bullish on Occidental Petroleum Corporation (NYSE:OXY) at the end of Q3 2022, compared to 66 funds in the last quarter. Warren Buffett’s Berkshire Hathaway is the biggest position holder in the company, with 194.35 million shares worth $12 billion. 

Here is what Smead Value Fund has to say about Occidental Petroleum Corporation (NYSE:OXY) in its Q3 2022 investor letter:

“Our top-performing stocks in the quarter include Occidental Petroleum (NYSE:OXY). Oil and gas have been the best game in the stock market town this year and it was a pleasant surprise to see home builders pick up even with dour news on interest rates and the economy. For the first three quarters of the year, we should change the name of our fund to the Jed Clampett Fund. Occidental Petroleum (NYSE:OXY), was one of the standouts. Up through the bear market came a “bubblin’ crude!”

2. Exxon Mobil Corporation (NYSE:XOM)

Average 3-month Volume as of January 31: 17.16 Million

YTD Share Price Gains as of January 31: 6.62%

Number of Hedge Fund Holders: 75

Exxon Mobil Corporation (NYSE:XOM) is one of the hot oil stocks to invest in. On January 31, the company declared a quarterly dividend of $0.91 per share, in line with previous. The dividend is payable on March 10, to shareholders of record on February 14. Exxon Mobil Corporation (NYSE:XOM) also increased and extended its share repurchase program with up to $35 billion of cumulative share repurchases in 2023-2024. In 2022, the company earned $55.7 billion and generated $76.8 billion in cash flow from operating activities by utilizing its advantageous portfolio.

On January 17, Scotiabank analyst Paul Cheng upgraded Exxon Mobil Corporation (NYSE:XOM) to Outperform from Sector Perform with a price target of $135, up from $120. According to the analyst, this upgrade is due to the improved cash flow from refining, which will benefit Exxon Mobil Corporation (NYSE:XOM) more than other major oil companies because it has the highest refining exposure. 

According to Insider Monkey’s Q3 data, 75 hedge funds were long Exxon Mobil Corporation (NYSE:XOM), compared to 72 funds in the last quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 33.8 million shares worth $3 billion. 

In its Q2 2022 investor letter, First Eagle Investments, an asset management firm, highlighted a few stocks and Exxon Mobil Corporation (NYSE:XOM) was one of them. Here is what the fund said:

“Integrated oil and gas giant Exxon Mobil Corporation (NYSE:XOM) performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industry wide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”

1. Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR)

Average 3-month Volume as of January 31: 33.03 Million

YTD Share Price Gains as of January 31: 18.74%

Number of Hedge Fund Holders: 33

Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) explores for, produces, and sells oil and gas in Brazil and internationally. The company operates through Exploration and Production, Refining, Transportation and Marketing, Gas and Power, and Corporate and Other Businesses segments. On January 18, Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) announced that its total oil and gas production for FY 2022 was 2.68 million boe per day, exceeding past its full-year target of 2.6 million boe per day. It is one of the hot stocks to monitor. 

On December 13, Bradesco BBI analyst Vicente Neto downgraded Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) to Neutral from Outperform with a R$26 price target. 

Among the hedge funds tracked by Insider Monkey, 33 funds were bullish on Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) at the end of Q3 2022, compared to 30 in the last quarter. Jim Simons’ Renaissance Technologies is a prominent stakeholder of the company, with 20.25 million shares worth $250 million. 

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out 12 Cheap Energy Stocks To Buy and 10 Recent Spinoff Companies Hedge Funds Are Buying.