Exxon Mobil (XOM), Chevron (CVX), Pioneer (PXD): Hedge Funds’ Favorite Energy Stocks

Chevron Corporation (NYSE:CVX)

Number of Hedge Fund Shareholders of CVX (as of June 30): 50

Value of Hedge Funds’ Holdings in CVX (as of June 30): $2.40 billion

Chevron Corporation (NYSE:CVX) ranks third in hedge fund ownership as of June 30 after failing to rank among the top-5 on March 31. Hedge fund ownership jumped by five to 50 during the second-quarter, lead by Zach Schreiber’s Point State Capital, which opened a 1.65 million-share position during the quarter. Jorge Paulo Lemann‘s 3G Capital was another prominent fund that opened a Chevron position in Q2, which consisted of 300,000 shares.

Chevron Corporation (NYSE:CVX) recently asserted that it should land within the upper-range of its fiscal year 2018 production guidance thanks to strong second-half growth drivers, including the launch of a second production unit at its massive LNG project in Australia. Chevron is also ramping up production in the lucrative Permian Basis, where it controls more than 1.5 million acres and currently operates 19 rigs. Chevron expects to raise its gas output by 7% in 2018.

Pioneer Natural Resources Company (NYSE:PXD)

Number of Hedge Fund Shareholders of PXD (as of June 30): 57

Value of Hedge Funds’ Holdings in PXD (as of June 30): $2.42 billion

Pioneer Natural Resources Company (NYSE:PXD) ranks second on our list of hedge funds’ favorite energy stocks, with the number of hedge fund shareholders jumping to 57 from 48 during the second-quarter. Seth Klarman’s Baupost Group remained the biggest Pioneer bull in our system, owning 4 million shares, while Jacob Doft’s Highline Capital Management (617,840 shares) and John Labanowski’s Brenham Capital Management (460,000 shares) were among the funds to open new stakes in the stock.

Pioneer Natural Resources Company (NYSE:PXD) is another E&P company with a stake in the Permian, where it produced 272,000 boe/d in the second-quarter, precisely in the middle of the company’s guidance range. That also accounted for the majority of Pioneer’s overall daily average production of 328,000. Pioneer plans to transition into a Permian pure-play in the future, one which will produce as much as 1 million boe/d from the region.

Marathon Petroleum Corp (NYSE:MPC)

Number of Hedge Fund Shareholders of MPC (as of June 30): 59

Value of Hedge Funds’ Holdings in MPC (as of June 30): $3.24 billion

Marathon Petroleum Corp (NYSE:MPC) was the most popular stock among hedge funds as of June 30, both in terms of overall ownership and second-quarter activity, which saw a net total of 16 hedge funds pile into the stock. Aaron Cowen’s Suvretta Capital Management (2.58 million shares), Jonathan Barrett and Paul Segal’s Luminus Management (859,137 shares), and Howard Guberman’s Gruss Asset Management (850,000 shares) were among the many funds to open new Marathon Petroleum positions during the quarter.

Marathon Petroleum Corp (NYSE:MPC) has enjoyed 18% gains in 2018, outpacing many of its rivals. Despite the gains, Marathon still has an attractive enterprise multiple (EV/EBITDA) of just 7.5. Marathon’s leverage has also been cut back to just over 1x after soaring above 2.5x in 2016. Marathon recently raised its 2018 production guidance to between 400,000 and 415,000 boe/d even after factoring in the sale of non-core assets that contributed 5,000 boe/d in the first-half of 2018.

Disclosure: None