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Barclays’ Betting On These Energy Stocks, But Here’s What Hedge Funds Think

Barclays has included Suncor Energy Inc. (USA) (NYSE:SU) in its list of best energy stocks in America because of its strong cash flow model, which differentiates it from other plays in the industry. According to the analysis firm, Suncor is capable of generating cash flows exceeding $2.48 billion between 2015 and 2019, covering its annual dividend payout of $1.36 billion while growing its production by 5%. It is important to note that the company was able to generate cash flow of $1.48 billion from operations in the first quarter of 2015. Upon the release of its first quarter results, Steve Williams, Chief Executive Officer of Suncor Energy Inc (USA) (NYSE:SU), also mentioned the firm’s ability to generate cash flow. He further added, “Suncor’s ability to generate solid cash flow during the first quarter of 2015 demonstrates the strength of our integrated model and spending discipline in the current crude price environment.” Hedge funds tracked at Insider Monkey maintained a bullish outlook towards Suncor Energy Inc. (USA) (NYSE:SU) at the end of the first quarter, with aggregate investments of $1.47 billion from 33 investors against net investments of $1.37 billion from 31 hedge fund managers at the end of 2014. Warren Buffett’s Berkshire Hathaway held the biggest position in Suncor Energy among the hedge funds we track, with its 22.34 million shares having a market value of $653.86 million.

For investors looking for profit-making opportunities in the energy sector, Valero Energy Corporation (NYSE:VLO) might be the best option. The shares of Valero have grown 25.93% year-to-date despite the declining commodity prices. Barclays has included Valero Energy Corporation (NYSE:VLO) in its list because of the company’s commitment towards creating more value for its shareholders. The international energy company returned $531 million in cash to its stockholders during the first quarter of 2015 and the firm reiterated its target of $1 billion worth of dropdowns for the year. The hedge fund managers tracked by Insider Monkey maintained a positive outlook on Valero Energy Corporation (NYSE:VLO) during the first quarter. According to our analysis, 57 hedge managers held a position in the energy company with net investments of $2.66 billion at the end of the quarter. These figures are an improvement from the previous quarter when only 53 hedge fund investors had Valero Energy Corporation (NYSE:VLO) in their portfolios, with total holdings valued at $2.63 billion. It should be noted that Valero’s shares we up by more than 25% in the first quarter however, so the marginal increase in capital among funds means investors did cash some money out of the stock. David E. Shaw’s D. E. Shaw was among the largest shareholders of the company, with 9.46 million shares valued at $601.63 million.

Disclosure: None

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