EOG Resources Inc (NYSE:EOG) is in the spotlight today after William Featherston of UBS upgraded the E&P to ‘Buy’ from ‘Neutral’, with the analyst commenting that the sector weakness in recent weeks is an opportunity for long term investors to buy quality at attractive prices. In addition to upgrading the stock, Featherston also raised his target price to $109 from the previous $105.
Like that of other E&P’s, EOG Resources Inc (NYSE:EOG) shares have retraced due to lower WTI prices, which fell from the mid-$50’s to around $49 per barrel today. The price of crude has fallen in the previous sessions due to concern that oil inventories around the world are still high and that there is a chance that OPEC might not extend its production cuts past June. Due to recent supportive OPEC comments and Wednesday’s strong EIA report, however, sentiment in WTI has improved a bit and many traders think the probability of a cut extension is high.
Given its low production costs, quality assets, and strong balance sheet, EOG Resources Inc (NYSE:EOG) is in a great position to weather any moderate WTI price volatility and today’s analyst upgrade acknowledges EOG Resources Inc (NYSE:EOG)’s strengths.
What Does The Smart Money Sentiment Say?
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).
According to our data, the smart money sentiment indicator for EOG Resources Inc (NYSE:EOG) has remained stable. Of the 742 elite funds we track, 48 funds owned $1.44 billion of EOG Resources Inc (NYSE:EOG) and accounted for 2.50% of the float on December 31, versus 51 funds and $1.28 billion respectively on September 30. Daniel S. Och‘s Oz Management more than doubled its holdings in EOG in the fourth quarter to 3.3 million shares.
Although crude prices have been soft of late, Wall Street still loves EOG Resources Inc (NYSE:EOG) due to its high quality acreage and strong financial profile. For those of you interested, check out this interesting article about the countries that produce the most oil.