Ecopetrol S.A. (EC) is One of the Best Integrated Oil and Gas Companies According to Hedge Funds

Ecopetrol S.A. (NYSE:EC) is one of the 10 integrated oil and gas companies to invest in according to hedge funds.

Back on May 26, Ecopetrol S.A. (NYSE:EC) reported that Ecopetrol Investimentos do Brasil LTDA, the company’s Brazilian subsidiary, had initiated a voluntary Tender Offer on the country’s B3 exchange, after getting B3’s approval. Through this offer, priced at R$23, the subsidiary aims to purchase more than 116 million common shares of Brava Energia S.A., which translates into around 25% of the target’s outstanding shares.

Soonthorn Wongsaita/Shutterstock.com

The quoted offer price represents an almost 21% premium over Brava Energia’s 90-day volume-weighted average price (VWAP) before the announcement. The tender offer is part of a previous announcement made on April 23 and would result in Ecopetrol holding a 51% controlling stake in Brava Energia, along with voting rights. Finalization of this transaction is contingent upon regulatory clearances, the Share Purchase Agreement, and other requirements. The tender offer will be open till the scheduled auction date on June 25.

Later in the first week of June, Andres Cardona of Citi raised the price target on Ecopetrol S.A. (NYSE:EC) from $14 to $18 while downgrading the stock to Neutral. The rating downgrade was based on the stock’s valuation surge, which the analyst linked to rising oil prices and a positive outlook on Colombia’s impending elections.

In a bearish scenario, Cardona believes there is a substantial downside risk on the stock. Despite the underlying risks, the adjusted target price yields almost 20% upside potential at the prevailing level.

Ecopetrol S.A. (NYSE:EC) is an integrated energy company focused on the exploration and production of oil and gas. The company is also involved in the extraction, processing, and transportation of fuel oil, crude oil, motor fuels, and other refined products. Additionally, it offers telecommunications, information technology, and transmission services.

While we acknowledge the risk and potential of EC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than EC and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.

Disclosure: None. Follow Insider Monkey on Google News.

1281292 - 11759070 - 1