5 Undervalued Energy Stocks to Buy According to Hedge Funds

In this article, we discuss the 5 undervalued energy stocks to buy according to hedge funds. In order to read our detailed analysis of the energy sector, go directly to 10 Undervalued Energy Stocks to Buy According to Hedge Funds.

5. EOG Resources, Inc. (NYSE:EOG)

Number of Hedge Fund Holders: 51

PE Ratio (as of March 7): 15.04

EOG Resources, Inc. (NYSE:EOG) features next on our list of 10 undervalued stocks to buy according to hedge funds. From all the hedge funds tracked by Insider Monkey in the fourth quarter of 2021, 51 held stakes in EOG Resources, Inc. (NYSE:EOG) with a combined value of $1.16 billion. This is up from 47 hedge funds in the third quarter, with aggregate stakes worth $1.02 billion.

Based in Texas, EOG Resources, Inc. (NYSE:EOG) deals in the exploration, production, and marketing of crude oil, and has operations in New Mexico and Texas, as well as the Republic of Trinidad and Tobago. By the end of 2021, the firm held estimated net reserves of 3.747 billion barrels of oil equivalent. On March 7, EOG Resources, Inc. (NYSE:EOG) was given an ‘Outperform’ rating by RBC Capital analyst Scott Hanold, who also raised the firm’s price target on the firm to $140 from $125. The analyst holds that the firm is on track to reach pre-COVID oil production levels by end of this year.

EOG Resources, Inc. (NYSE:EOG) reported earnings per share of $3.09 in the fourth quarter, missing estimates by $0.08. Revenue for Q4 was $6.04 billion, beating estimates by $481.14 million, and above 103.84% from the year-ago quarter.

Artisan Partners, an investment firm, mentioned many stocks in its Q4 2021 investor letter, and EOG Resources, Inc. (NYSE:EOG) was one of them. The fund said:

“EOG Resources, a US shale-focused E&P firm, has been a beneficiary of higher energy prices. The business enjoys a low-cost production position and a strong balance sheet which enabled the company to increase production capabilities during the downturn. As energy prices recover and the industry adjusts to the new supply and demand dynamics, investors have begun to appreciate the earnings power of the business. EOG’s management focuses on return on invested capital and cash flow generation, which distinguishes it from most of the company’s competitors. We believe EOG’s high-quality management team and access to low-cost reserves are sustainable competitive advantages in a commodity industry.”