3. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 72
P/E Ratio as of December 5: 10.70
Chevron Corporation (NYSE:CVX) is a prominent American multinational energy company primarily focused on the oil and gas industry. Originally established as the Standard Oil Company of California and emerging as the second-largest direct descendant of Standard Oil, Chevron has its headquarters in San Ramon, California, and operates across over 180 countries worldwide.
On October 23, Chevron Corporation (NYSE:CVX) announced a definitive agreement with Hess Corporation for an all-stock transaction valued at $53 billion. Under this agreement, Chevron will acquire all outstanding shares of Hess. The acquisition is expected to enhance and broaden Chevron’s portfolio, with a particular emphasis on the Stabroek block in Guyana, described as an “exceptional” asset offering industry-leading cash margins and a low carbon footprint, promising continued production growth into the next decade.
By the end of this year’s third quarter, 72 out of the 910 hedge funds part of Insider Monkey’s database had held a stake in Chevron Corporation (NYSE:CVX). Out of these, the firm’s biggest investor is Warren Buffett’s Berkshire Hathaway since it owns 110.24 million shares that are worth $18.59 billion.
The London Company Large Cap Strategy made the following comment about Chevron Corporation (NYSE:CVX) in its first quarter 2023 investor letter:
“Initiated: Chevron Corporation (NYSE:CVX) – CVX is an integrated energy and chemical producer. Its upstream segment explores for, produces, processes and transfers energy products. Its downstream segment refines and markets these products in addition to industrial plastics and fuel and lubricant additives. Among the major oil companies, CVX is the most levered to oil and gas production; it has one of the most successful exploration programs and among the best production profiles. CVX also has less exposure to the downstream business, which provides an above-peer operating margin profile and supports CVX’s return on invested capital. CVX has one of the strongest balance sheets in the oil industry with net debt/EBITDA of just 0.1x. The combination of its low cost positioning and strong balance sheet gives us greater confidence in downside protection despite its ties to a volatile commodity. We’re attracted to management’s rational approach to capital allocation, with consideration for the full cycle. In terms of capital allocation, CVX just announced a $75B share repurchase plan, and it pays a healthy 3.5% dividend. We have owned CVX in the past and it is the only Energy exposure in the Large Cap portfolio.”
