5 Undervalued Stocks to Buy According to Billionaire Mario Gabelli

4. National Fuel Gas Company (NYSE:NFG)

Number of Hedge Fund Holders: 21 

PE Ratio: 14.59

National Fuel Gas Company (NYSE:NFG) is a diversified energy firm. According to the latest filings, GAMCO Investors owned over 1.2 million shares of the company at the end of the fourth quarter of 2021 worth $80 million, representing 0.68% of the portfolio. 

National Fuel Gas Company (NYSE:NFG) is one of the favorite energy stocks in the finance world. Among the hedge funds being tracked by Insider Monkey, Boston-based firm Arrowstreet Capital is a leading shareholder in National Fuel Gas Company (NYSE:NFG) with 382,644 shares worth more than $24 million. 

In its Q1 2021 investor letter, Heartland Advisors, an asset management firm, highlighted a few stocks and National Fuel Gas Company (NYSE:NFG) was one of them. Here is what the fund said:

“The ho-hum Utilities sector isn’t typically a place to hunt for strong growth prospects. However, for investors willing to do their homework, opportunities do exist. Portfolio holding National Fuel Gas Company (NYSE:NFG) is a prime example.

National Fuel Gas Company (NYSE:NFG) is a dividend aristocrat—50 consecutive years of dividend increases. Although the business is lumped in with run-of-the-mill power companies, it is much more diverse. In addition to its utility operations, a pipeline and storage division produces almost a quarter of its profits, and the company generates nearly 40% of its bottom line from natural gas exploration and production.

Shares of National Fuel Gas Company (NYSE:NFG) are trading at a mid-teens discount to their historic average based on price/book. Given the state of the energy industry over the past few years, we believe the company’s gas unit could be an overlooked source of growth. Additionally, the utility recently received regulatory approval on a natural gas pipeline expansion in Pennsylvania, which is expected to produce a windfall in free cash flow.”