5 Most Popular Energy Stocks Among Hedge Funds: Exxon Mobil (XOM), Halliburton (HAL), More

Investors are hopeful that big oil producers will agree to slash oil production in the crucial OPEC meeting next week in Vienna, Austria. On Monday, the S&P 500 touched a new high of 2,194.34, mainly due to the 2% rise in the energy sector. Analysts think that the troubled oil industry will revive in the near future amid growing demand and dwindling U.S shale stockpiles.

In this article, we’ll analyze the most popular energy stocks by assessing the data from nearly 750 hedge funds tracked by Insider Monkey which filed 13Fs for the September 30 reporting period. The energy stocks which hedge funds like the most as of the end of September and heading into that crucial OPEC meeting are Pioneer Natural Resources (NYSE:PXD), Anadarko Petroleum Corporation (NYSE:APC), Exxon Mobil Corporation (NYSE:XOM), Schlumberger Limited. (NYSE:SLB), and Halliburton Company (NYSE:HAL), which we’ll analyze in this article.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

#5 Halliburton Company (NYSE:HAL)

Of the investors in our database, 56 were bullish on Halliburton Company (NYSE:HAL) at the end of the third quarter, down from 62 a quarter earlier. Those investors owned $1.80 million worth of the company’s shares on September 30. Investment firm Oppenheimer recently rated Halliburton Company (NYSE:HAL) a ‘Buy’, as it thinks the oil industry is set to reverse its long downturn. In the third quarter, Halliburton earned $0.01 a share on $3.83 billion in revenue, compared to expectations of a loss of $0.07 per share on $3.9 billion in revenue. Daniel S. Och’s OZ Management owns 4.73 million shares of Halliburton as of the end of the third quarter.

#4 Schlumberger Limited. (NYSE:SLB)

59 funds tracked by Insider Monkey had amassed shares of Schlumberger Limited. (NYSE:SLB) as of the end of September, valued at $1.56 billion. Those positions amounted to a mere 1.90% of the company’s float, as hedge funds were relatively underweight the stock. Schlumberger’s stock has gained over 16% year-to-date. Last week, investment firm Jefferies upped its rating on the world’s larger oil driller to ‘Buy’ from ‘Hold’ and set a price target of $96 on it. The firm cited improving margins as the main reason for the rating upgrade. In the third quarter, Schlumberger earned $0.25 a share on $7 billion in revenue, topping EPS estimates by $0.03 but missing by $80 million on the top-line.

We’ll check out the three top energy picks of hedge funds on the next page.

#3 Exxon Mobil Corporation (NYSE:XOM)

As of the end of the third quarter, 60 hedge funds tracked by Insider Monkey reported owning long positions in Exxon Mobil Corporation (NYSE:XOM). These funds collectively owned $2.82 billion worth of Exxon’s stock, which accounted for 0.8% of the company’s float. The stock is up by over 11% so far this year. Lower oil prices have dented the Texas-based oil exploration giant, as Exxon’s earnings declined by 54% year-over-year in the first nine months of 2016, to $6.2 billion. Ken Fisher’s Fisher Asset Management has 6.11 million shares of Exxon in its portfolio as of September 30.

#2 Anadarko Petroleum Corporation (NYSE:APC)

Anadarko received increased attention from the smart money tracked by Insider Monkey in the third quarter, as a net total of 17 funds added shares of the energy company to their holdings, bringing the total number of bullish funds invested in the company to 65 by the end of the third quarter. These funds owned 7.90% of Anadarko Petroleum Corporation (NYSE:APC)’s float. Investment firm Goldman Sachs recently added Anadarko Petroleum Corporation (NYSE:APC) to its Hedge Fund VIP list, mirroring what our own data tells us: that hedge funds are piling into the stock. Anadarko Petroleum recently completed the sale of its East Texas assets to Castleton Commodities International LLC for $1 billion. Andreas Halvorsen’s Viking Global reported ownership of 8.54 million shares of Anadarko Petroleum Corporation (NYSE:APC) as of the end of the third quarter.

#1 Pioneer Natural Resources (NYSE:PXD)

A total of 72 hedge funds tracked by Insider Monkey were bullish on Pioneer Natural Resources (NYSE:PXD) as of the end of the third quarter, compared to 74 funds a quarter earlier. Nonetheless, it ranked as hedge funds’ favorite energy stock for the second-straight quarter. Hedge funds have certainly profited from their bullish stance on the stock, as its shares are up by over 46% year-to-date. The Texas-based oil and gas exploration company earned $0.13 per share in the third quarter, missing the consensus analyst estimate of $0.16. John H. Scully’s SPO Advisory Corp owns 6.07 million shares of Pioneer as of September 30, unchanged quarter-over-quarter.

Disclosure: None