Top 5 Oil and Gas Stocks To Invest In According To Hedge Funds

In this article, we discuss top 5 oil and gas stocks to invest in according to hedge funds. If you want to read our discussion on the energy industry, head over to Top 12 Oil and Gas Stocks To Invest In According To Hedge Funds. 

5. Schlumberger Limited (NYSE:SLB)

Number of Hedge Fund Holders: 65

Schlumberger Limited (NYSE:SLB) is a global energy technology provider operating worldwide. The company is organized into four divisions – Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. Schlumberger Limited (NYSE:SLB) is one of the best energy stocks to buy. On January 19, Schlumberger Limited (NYSE:SLB) reported a Q4 non-GAAP EPS of $0.86 and a revenue of $8.99 billion, topping Wall Street estimates by $0.03 and $50 million, respectively. 

According to Insider Monkey’s third quarter database, 65 hedge funds were bullish on Schlumberger Limited (NYSE:SLB), compared to 60 funds in the prior quarter. Rajiv Jain’s GQG Partners is the biggest stakeholder of the company, with approximately 36 million shares worth $2 billion. 

Alger Spectra Fund made the following comment about Schlumberger Limited (NYSE:SLB) in its Q3 2023 investor letter:

“Schlumberger Limited (NYSE:SLB) provides technology for reservoir characterization, drilling, production, and processing to the oil and gas industry. During the period, shares contributed to performance driven in large part by higher oil prices and strong fiscal second quarter earnings results. Within its quarterly report. the company highlighted growing momentum in international offshore markets that reflected market share gains as well as solid end market activity, leading to strong profit margins and healthy free cash flow generation, in our view.”

4. Pioneer Natural Resources Company (NYSE:PXD)

Number of Hedge Fund Holders: 67

Pioneer Natural Resources Company (NYSE:PXD) functions as an autonomous exploration and production company in the United States, specifically engaged in the exploration, development, and production of oil, natural gas liquids, and gas. It is one of the best energy stocks to invest in. 

On February 7, Pioneer Natural Resources Company (NYSE:PXD) received shareholder approval for its planned merger with Exxon Mobil Corporation (NYSE:XOM), anticipating completion in the second quarter. The all-stock deal, valued at $59.5 billion or $253 per share, was announced by Exxon in October. 

According to Insider Monkey’s third quarter database, 67 hedge funds were bullish on Pioneer Natural Resources Company (NYSE:PXD), compared to 54 funds in the preceding quarter. Israel Englander’s Millennium Management is the biggest stakeholder of the company, with 1.5 million shares worth $353.6 million. 

Carillon Chartwell Mid Cap Value Fund made the following comment about Pioneer Natural Resources Company (NYSE:PXD) in its Q3 2023 investor letter:

“The Russell Midcap Value Index declined 4.5%, with only the energy and financials sectors generating positive returns. The healthcare, communication services, and consumer staples sectors were the weakest. Pioneer Natural Resources Company (NYSE:PXD) produces oil and natural gas in the Permian Basin of West Texas and southeastern New Mexico. Its shares rallied along with oil prices, a key driver of revenue and earnings.”

3. Chevron Corporation (NYSE:CVX)

Number of Hedge Fund Holders: 72

Chevron Corporation (NYSE:CVX) is involved in integrated energy and chemicals operations. The company’s activities span two segments – Upstream, covering exploration, development, production, transportation of crude oil and natural gas, as well as LNG operations; and Downstream, focusing on refining, marketing of petroleum products, renewable fuels, and petrochemicals manufacturing. Chevron Corporation (NYSE:CVX) is one of the top energy stocks to buy. 

On February 2, Chevron Corporation (NYSE:CVX) declared a $1.63 per share quarterly dividend, a 7.9% increase from its prior dividend of $1.51. The dividend is payable on March 11, to shareholders of record as of February 16. 

According to Insider Monkey’s third quarter database, 72 hedge funds were long Chevron Corporation (NYSE:CVX), compared to 73 funds in the earlier quarter. Warren Buffett’s Berkshire Hathaway is the leading stakeholder of the company, with 110.2 million shares worth $18.6 billion. 

Ariel Focus Fund made the following comment about Chevron Corporation (NYSE:CVX) in its third 2023 investor letter:

“Also in the quarter, we initiated a position in Chevron Corporation (NYSE:CVX), the second largest integrated energy company in the U.S., operating in exploration, production and refining on a global scale. We view the company as competitively advantaged with a strong balance sheet, sustainable growth pathway and an effective management team. Going forward CVX expects improved cost efficiencies and production growth via its differentiated position in the Permian Basin and recent acquisition of Noble Energy. Additionally, management believes a combination of its new higher-margin projects along with operational improvements will drive a double-digit return of capital employed by 2027. Although oil and gas prices, which lay outside of the company’s control, ultimately dictate Chevron’s earnings and cash flow profile, the organization is laser focused on capital discipline. It is this lack of predictability, and potential fear of a global recession which presented us with an opportunity to initiate a position in this high barrier to entry producers at reasonable prices.”

2. Occidental Petroleum Corporation (NYSE:OXY)

Number of Hedge Fund Holders: 75

Occidental Petroleum Corporation (NYSE:OXY) is involved in the acquisition, exploration, and development of oil and gas properties across the United States, the Middle East, North Africa, and Latin America. The company operates through three segments – Oil and Gas, Chemical, and Midstream and Marketing. Occidental Petroleum Corporation (NYSE:OXY) is one of the best energy stocks to watch. On November 7, Occidental Petroleum Corporation (NYSE:OXY) reported a Q3 non-GAAP EPS of $1.18 and a revenue of $7.4 billion, outperforming Wall Street estimates by $0.32 and $440 million, respectively.  

According to Insider Monkey’s third quarter database, 75 hedge funds were bullish on Occidental Petroleum Corporation (NYSE:OXY), compared to 73 funds in the earlier quarter. Warren Buffett’s Berkshire Hathaway is the leading position holder in the company, with a stake worth $14.5 billion. 

Here is what Smead Value Fund has to say about Occidental Petroleum Corporation (NYSE:OXY) in its Q3 2022 investor letter:

“Our top-performing stocks in the quarter include Occidental Petroleum (NYSE:OXY). Oil and gas have been the best game in the stock market town this year and it was a pleasant surprise to see home builders pick up even with dour news on interest rates and the economy. For the first three quarters of the year, we should change the name of our fund to the Jed Clampett Fund. Occidental Petroleum (NYSE:OXY), was one of the standouts. Up through the bear market came a “bubblin’ crude!”

1. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 79

Exxon Mobil Corporation (NYSE:XOM) is engaged in the exploration and production of crude oil and natural gas globally. Operating through Upstream, Energy Products, Chemical Products, and Specialty Products segments, the company explores, produces, manufactures, and markets various energy-related products. Exxon Mobil Corporation (NYSE:XOM) is one of the best oil and gas stocks to buy. 

On February 2, Exxon Mobil Corporation (NYSE:XOM) declared a quarterly dividend of $0.95 per share, in line with previous. The dividend is payable on March 11, to shareholders of record on February 14. 

According to Insider Monkey’s third quarter database, 79 hedge funds were bullish on Exxon Mobil Corporation (NYSE:XOM), compared to 71 funds in the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the largest stakeholder of the company, with over 13 million shares worth $1.5 billion.

In its Q2 2022 investor letter, First Eagle Investments, an asset management firm, highlighted a few stocks and Exxon Mobil Corporation (NYSE:XOM) was one of them. Here is what the fund said:

“Integrated oil and gas giant Exxon Mobil Corporation (NYSE:XOM) performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industry wide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”

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