5 Undervalued Energy Stocks to Buy According to Hedge Funds

4. Devon Energy Corporation (NYSE:DVN)

Number of Hedge Fund Holders: 51

PE Ratio (as of March 7): 14.29

Devon Energy Corporation (NYSE:DVN) is an energy company that engages in the exploration and marketing of oil, natural gas, and natural gas liquids in the United States. 51 hedge funds were bullish on the firm’s shares in the fourth quarter, as compared to 48 in the preceding quarter. With 14.5 million shares worth $638.96 million, GQG Partners was the top shareholder in Devon Energy Corporation (NYSE:DVN) in Q4 2021. This represented a 5% increase in holding from the previous quarter.

On February 22, Raymond James analyst John Freeman maintained a ‘Strong Buy’ rating on Devon Energy Corporation (NYSE:DVN), whilst increasing the price target to $70 from $65. Freeman sees the firm well-positioned moving forward, with its shareholder-friendly dividend payout structure, strong balance sheet, and a deep drilling inventory all providing positive indicators.

As of March 7, Devon Energy Corporation (NYSE:DVN) gained 144.72% in the last year, and 112.33% in the last 6 months. The firm’s revenue for Q4 beat estimates by $1.04 billion, coming in at $4.27 billion. EPS was recorded at $1.39, outperforming estimates by $0.15.

Investment firm GoodHaven Capital Management talked about Devon Energy Corporation (NYSE:DVN) in its investor letter for Q4 2020, stating:

“After a rough start to the year our two biggest energy holdings – WPX Energy rebounded materially in the last six months though energy was still our biggest detractor for the year. I’ve previously written about deciding earlier this year to direct new capital towards better businesses versus adding more to the energy sector, but given the material optionality at WPX, we opted to maintain a material exposure. Recently WPX announced an all stock merger with a larger competitor – Devon Energy – which will leave the new company with plenty of cash flow at lower oil prices, less leverage, and material upside to higher commodity prices.”