In this article, we discuss the top 2 oil and gas stocks to buy according to billionaire Leon Cooperman. If you want to see our detailed discussion of the investment philosophy of Leon Cooperman and the performance of his hedge fund Omega Advisors, go directly to the 7 Oil and Gas Stocks to Buy According to Billionaire Leon Cooperman.
2. Energy Transfer LP (NYSE:ET)
Cooperman’s Stake Value: $71,620,000
Percentage of Leon Cooperman’s 13F Portfolio: 4.02%
Number of Hedge Fund Holders: 29
Energy Transfer LP (NYSE:ET) provides energy-related services. The company owns and operates approximately 9,400 miles of natural gas transportation pipelines and three natural gas storage facilities in Texas, and 12,340 miles of interstate natural gas pipelines. It also sells natural gas to electric utilities, independent power plants, local distribution companies, industrial end-users, and other marketing companies. In addition, the company owns and operates natural gas gathering and natural gas liquid (NGL) pipelines, processing plants, and treating and conditioning facilities in Texas, New Mexico, West Virginia, Pennsylvania, Ohio, Oklahoma, Kansas, and Louisiana. Energy Transfer LP (NYSE:ET) was founded in 1996 and is headquartered in Dallas, Texas.
This September, Citi analyst Timm Schneider raised his price target on Energy Transfer LP (NYSE:ET) to $15 from $14 and reiterated a Buy rating on the shares.
According to Leon Cooperman’s latest 13F portfolio, the billionaire owns over 6.73 million shares in Energy Transfer LP (NYSE:ET) that are worth more than $71.62 million. The investment covers 4.02% of Mr. Cooperman’s investment portfolio.
As of the second quarter of 2021, Energy Transfer LP (NYSE:ET) reported an EPS of $0.20, missing estimates by -$0.07. The company also reported revenues of $15.1 billion, up 105.79% year-over-year, and beating estimates by $178.09 million. Energy Transfer LP (NYSE:ET) has gained 19.82% over the past six months, and 51.64% year to date.
By the end of the second quarter of 2021, 29 hedge funds out of the 873 tracked by Insider Monkey held stakes in Energy Transfer LP (NYSE:ET) worth $835.2 million. This is compared to 25 hedge funds in the previous quarter with a total stake value of approximately $647.7 million.
Miller Value Partners recently released their second-quarter 2021 Investor Letter, in which the firm mentioned Energy Transfer LP (NYSE:ET). Here’s what they had to say:
“Energy Transfer LP (ET)rose over the period along with the price of oil climbing 40.59% over the period. The company received positive news that the Dakota Access Pipeline project would not be shut down while the Environmental Impact Statement by the US Army Core of Engineers is drawn up. Energy Transfer reported strong 1Q results with revenue of $17B surpassing expectations for $11.8B with adjusted earnings before income, taxes, depreciation and amortization (EBITDA) hitting $5.04B ahead of consensus of $2.77B. The company raised full year adjusted EBITDA guidance to $12.9-13.3B from $10.6-11.0B previously, with the increase largely related to the benefits realized from Winter Storm Uri. The company paid down $3.7B in debt during the quarter, using strong cash f low to reduce leverage. The company also announced the issuance of $900M in 6.5% Series H perpetual preferreds with the company using the proceeds to repay debt and for general purposes.”
1. Devon Energy Corporation (NYSE:DVN)
Cooperman’s Stake Value: $91,075,000
Percentage of Leon Cooperman’s 13F Portfolio: 5.11%
Number of Hedge Fund Holders: 50
Devon Energy Corporation (NYSE:DVN) is an independent energy company that primarily engages in the exploration, development, and production of oil, natural gas, and natural gas liquids in the United States. It operates approximately 3,942 gross wells. Devon Energy Corporation (NYSE:DVN) was founded in 1971 and is headquartered in Oklahoma City, Oklahoma.
This July, Piper Sandler analyst Mark Lear raised his price target on Devon Energy Corporation (NYSE:DVN) to $37 from $34 and kept an Overweight rating on the shares. The exploration and production group has come under pressure since the start of the third quarter on concerns the post-pandemic recovery “could potentially hit a snag,” but the “de-rate presents another attractive entry opportunity,” Lear told investors in a research note.
According to Leon Cooperman’s latest 13F portfolio, the billionaire owns over 3.12 million shares in Devon Energy Corporation (NYSE:DVN) that are worth more than $91 million. The investment covers an impressive 5.11% of Mr. Cooperman’s investment portfolio.
As of the second quarter of 2021, Devon Energy Corporation (NYSE:DVN) reported earnings per share of $0.60, beating estimates by $0.07. The company generated revenues of $2.42 billion, a 513.45% year-over-year increase, and beat estimates by $367.95 million. Devon Energy Corporation (NYSE:DVN) has gained 40% over the past six months, and 88.72% year to date.
By the end of the second quarter of 2021, 50 hedge funds out of the 873 tracked by Insider Monkey held stakes in Devon Energy Corporation (NYSE:DVN) worth over $1 billion. This is compared to 52 hedge funds in the previous quarter with a total stake value of approximately $1.46 billion.
GoodHaven Capital Management, a concentrated portfolio investment management firm, published its fourth-quarter 2020 investor letter, in which the firm mentioned Devon Energy Corporation (NYSE:DVN). Here’s their verdict:
“After a rough start to the year our two biggest energy holdings – WPX Energy rebounded materially in the last six months though energy was still our biggest detractor for the year. I’ve previously written about deciding earlier this year to direct new capital towards better businesses versus adding more to the energy sector, but given the material optionality at WPX, we opted to maintain a material exposure. Recently WPX announced an all stock merger with a larger competitor – Devon Energy – which will leave the new company with plenty of cash flow at lower oil prices, less leverage, and material upside to higher commodity prices.”
See also 10 Best Cheap Oil Stocks to Buy in 2021 and 10 Best Oil Stocks that Pay Dividends
