5 Stock Picks to Beat the Market Slump

4. Devon Energy Corporation (NYSE:DVN)

Number of Hedge Fund Holders: 57

Year-to-Date Price Gains: 26.6%

Devon Energy Corporation (NYSE:DVN) is an independent energy company based in Oklahoma City, Oklahoma. The company explores, develops, and produces oil, natural gas, and natural gas liquids in the US. It operates about 5,135 gross wells.

Mizuho’s Vincent Lovaglio holds a Buy rating on Devon Energy Corporation (NYSE:DVN) shares as of August 18. The analyst also raised his price target on the stock from $88 to $91.

The 12-month training total return for Devon Energy Corporation (NYSE:DVN) is 172.6%. The company is considered to be one of the stocks with the most momentum in the market at present. Over the next three to five years, Devon Energy Corporation’s (NYSE:DVN) EPS is expected to rise by 19.5%. The company’s one-year dividend growth rate currently stands at 318.6%.

In total, 57 hedge funds were long the stock, with a total stake value of $1.5 billion.

Investment management company GoodHaven Capital Management mentioned Devon Energy Corporation (NYSE:DVN) in its second quarter 2022 investor letter. Here’s what it 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 a 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 lead 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 mostly 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.”