In this article, we discuss the 5 most undervalued natural gas stocks to buy according to hedge funds. To read the detailed analysis of the natural gas sector, go directly to the 12 Most Undervalued Natural Gas Stocks To Buy According To Hedge Funds.
5. BP p.l.c. (NYSE:BP)
TTM PE Ratio as of November 8: 4.36
Number of Hedge Fund Holders: 36
BP p.l.c. (NYSE:BP) is one of the largest oil and gas companies in the world. It is a vertically integrated company that operates in all areas, from oil and gas exploration to trading. The company was founded in 1909 and is headquartered in London, UK.
Due to a disappointing performance in the third quarter, BP p.l.c. (NYSE:BP)’s stock has declined over the past week and is trading at an attractive valuation. The company’s earnings dropped mainly due to lower natural gas prices, but it still has a strong balance sheet and a healthy portfolio of assets. It is the 5th most undervalued natural gas stock to buy according to hedge funds.
On November 6, Morgan Stanley analyst Martijn Rats maintained an Overweight rating on BP p.l.c. (NYSE:BP)’s shares after lowering the price target to 610 GBp from 700 GBp.
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Follow B P Plc (NYSE:BP)
4. Southwestern Energy Company (NYSE:SWN)
TTM PE Ratio as of November 8: 1.50
Number of Hedge Fund Holders: 44
Southwestern Energy Company (NYSE:SWN) is a Texas-based natural gas exploration and production company. In its third quarter, the company posted a non-GAAP EPS of $0.10, exceeding the estimates by 3 cents, and beat the revenue estimates by $80 million after generating $1.44 billion.
Southwestern Energy Company (NYSE:SWN)’s stock was owned by 44 hedge funds at a combined value of $1.013 billion in the second quarter of 2023. D E Shaw was the company’s most prominent hedge fund investor, with over 29.47 million shares worth $177.124 million.
On October 17, Reuters reported that Chesapeake Energy Corporation (NASDAQ:CHK) is exploring the acquisition of Southwestern Energy Company (NYSE:SWN) to become the largest natural gas producer in the United States. Jefferies believes that if the pairing is “done right”, it could create a “must own.” The firm has a Buy rating on Southwestern Energy Company (NYSE:SWN)’s stock and a price target of $9.50.
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Follow Southwestern Energy Co (NYSE:SWN)
3. Chesapeake Energy Corporation (NASDAQ:CHK)
TTM PE Ratio as of November 8: 2.28
Number of Hedge Fund Holders: 44
Chesapeake Energy Corporation (NASDAQ:CHK) is an upstream oil and gas company and is headquartered in Oklahoma. The corporation has operations in Haynesville and Marcellus shales and is one of the most undervalued natural gas stocks to buy according to hedge funds.
On November 1, BofA lowered the price target on Chesapeake Energy Corporation (NASDAQ:CHK)’s stock to $141 from $147 and maintained a Buy rating.
On October 31, Chesapeake Energy Corporation (NASDAQ:CHK) announced that its subsidiary, Chesapeake Energy Marketing L.L.C., has entered into a Heads of Agreement (HOA) with Vitol to supply 1 million tonnes of LNG per annum for 15 years. The purchase price will be indexed according to Japan Korea Marker, and the agreement’s target start date is in 2028.
On October 31, Chesapeake Energy Corporation (NASDAQ:CHK) released its third-quarter earnings result with a non-GAAP EPS of $1.09, which topped the estimates by $0.49. The company reported $506 million in net cash provided by operating activities and 3,495 MMcfe per day in total net production.
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Follow Chesapeake Energy Corp (NYSE:CHK)
2. EQT Corporation (NYSE:EQT)
TTM PE Ratio as of November 8: 5.46
Number of Hedge Fund Holders: 51
EQT Corporation (NYSE:EQT) is the largest upstream oil and gas production company in the U.S. Through its subsidiary, it also offers commercial and asset management services.
On October 12, EQT Corporation (NYSE:EQT) announced a 5% raise in its quarterly dividend to $0.1575, payable by December 1 to the shareholders of record on November 8. The company’s dividend yield is 1.579% as of November 8.
On October 17, it was announced that EQT Corporation (NYSE:EQT) was one of the recipients of $7 billion in grants by the Biden administration to develop the regional hydrogen hubs in the U.S. The company is one of the partners in the Appalachian Hydrogen Hub and will receive up to $925 million.
On October 25, EQT Corporation (NYSE:EQT) released its Q3 earnings result with a non-GAAP EPS of $0.30, which beat the analysts’ estimates by $0.40. The revenue of the quarter was $1.18 billion and topped the estimates by $30 million.
ClearBridge Investments talked about EQT Corporation (NYSE:EQT) in its second-quarter investor letter. Here is what it said:
“The energy sector was another positive contributor, primarily driven by our investment in EQT Corporation (NYSE:EQT). As North America’s leading natural gas provider, EQT had seen its share price slide as the lackluster reopening of China and a milder-than-expected winter in the northern hemisphere weighed on natural gas prices. However, as recessionary fears have given way to optimism and the prospect for greater energy demand, EQT’s share price has rebounded. While we continue to expect volatility in commodities prices, we believe that global energy demand, especially in Europe, along with the company’s leadership position in the natural gas market, make it a strong long-term compounder for the portfolio.”
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1. Cheniere Energy, Inc. (NYSE:LNG)
TTM PE Ratio as of November 8: 3.42
Number of Hedge Fund Holders: 60
Cheniere Energy, Inc. (NYSE:LNG) is a Texas-based midstream energy company. Through its subsidiaries, the company engages in LNG and natural gas marketing businesses, gas liquefaction and export, regasification, and more.
On November 2, Cheniere Energy, Inc. (NYSE:LNG) announced that it has signed an agreement with Foran Energy Group Co., Ltd. Under the liquefied natural gas sale and purchase agreement, the company’s subsidiary, Cheniere Marketing, will provide nearly 0.9 million tons per annum of LNG for 20 years.
On November 2, Cheniere Energy, Inc. (NYSE:LNG) posted its third-quarter earnings result with an EPS of $7.03. The company’s revenue of $4.2 billion surpassed the estimates by $90 million. During the quarter, the company paid off $50 million of long-term debt and successfully repurchased 2.2 million shares for $357 million.
On October 30, Cheniere Energy, Inc. (NYSE:LNG) increased its quarterly dividend by 10% to $0.435, payable by November 17 to the shareholders of record on November 9. As of November 8, the dividend yield of the company is 1.022%.
Cheniere Energy, Inc. (NYSE:LNG) was mentioned in TimesSquare Capital Management’s Q4 2022 investor letter. Here is what it said:
“Within Energy, Cheniere Energy, Inc. (NYSE:LNG) is an energy infrastructure company that operates liquefied natural gas (LNG) terminals in Louisiana and Texas. Despite reporting inline for the latest quarter, its stock traded down -9%. Contributing factors were Europe had filled its storage ahead of the winter and a recent dip in natural gas pricing. The market for LNG is likely to remain tight for the next several years. Notably, Cheniere paid down $1.3 billion of long-term debt and repurchased $75 million of common stock during the quarter. Cheniere is well positioned to benefit from ongoing tightness in global gas markets.”
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Follow Cheniere Energy Inc. (NYSEMKT:LNG)
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