In this article, we discuss 10 energy stocks to buy according to billionaire Bruce Kovner’s Caxton Associates. If you want to skip our detailed analysis of these stocks, go directly to 5 Energy Stocks to Buy According to Billionaire Bruce Kovner’s Caxton Associates.
Bruce Kovner is a billionaire American investor who founded Caxton Associates in 1983, which is a New York-based hedge fund. Kovner started his career in commodities trading after graduating from Harvard University, working with Michael Marcus in 1977, where he made a name for himself as a trader.
Kovner retired from Caxton Associates in 2011, and a year later, he formed CAM Capital to manage his private investments and trading activity. The third quarter portfolio at Caxton Associates is valued at $905 million as of Q3 2021, and investments are focused on the information technology, industrials, healthcare, finance, consumer discretionary, and communications sectors, with a top ten holdings concentration of 52.46%.
The largest investment in the Q3 portfolio of Caxton Associates is Tesla, Inc. (NASDAQ:TSLA), with the hedge fund holding 177,990 shares of the company, worth $138 million. As per the 13F filings from September 2021, the hedge fund purchased 198 new stocks, bought additional stakes in 119 equities, sold out of 223 companies, and reduced holdings in 86 securities.
The most notable stocks in the third quarter portfolio of Caxton Associates include Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Netflix, Inc. (NASDAQ:NFLX).
Bruce Kovner of Caxton Associates LP
Our Methodology
We used the Q3 portfolio of Bruce Kovner’s Caxton Associates to select 10 energy stocks from the portfolio, mentioning relevant comparison metrics like Q3 earnings, analyst ratings, and the hedge fund sentiment around each stock.
We ranked the stocks according to the hedge fund’s stake in each holding.
Energy Stocks to Buy According to Billionaire Bruce Kovner’s Caxton Associates
10. EQT Corporation (NYSE:EQT)
Caxton Associates’ Stake Value: $845,000
Percentage of Caxton Associates’ 13F Portfolio: 0.09%
Number of Hedge Fund Holders: 57
EQT Corporation (NYSE:EQT) is an American energy company that specializes in hydrocarbon exploration and pipeline transport, providing petroleum, natural gas, and natural gas liquids. Caxton Associates acquired a stake in EQT Corporation (NYSE:EQT) in the third quarter, buying 41,317 shares of the company, worth $845,000, representing 0.09% of the fund’s total 13F portfolio.
In the third quarter earnings report, published by EQT Corporation (NYSE:EQT) on October 27, the company posted an EPS of $0.12, beating estimates by $0.17.
EQT Corporation (NYSE:EQT) on December 13 announced that its board approved a $1 billion share repurchase program and has decided to reinstate its regular dividend starting in the first quarter of 2022.
Morgan Stanley analyst Devin McDermott upgraded EQT Corporation (NYSE:EQT) on November 19 to Overweight from Equal Weight with a price target of $31, up from $24. Even though EQT Corporation (NYSE:EQT) has underperformed recently, the analyst expects EQT Corporation (NYSE:EQT)’s free cash flow to enterprise value ratio to expand in FY23.
Adage Capital Management, one of the leading EQT Corporation (NYSE:EQT) stakeholders, elevated its position in EQT Corporation (NYSE:EQT) by 7891% in Q3, holding almost 4 million shares worth $81.7 million. Overall, 57 hedge funds were bullish on the stock as of September 2021.
In addition to Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Netflix, Inc. (NASDAQ:NFLX), EQT Corporation (NYSE:EQT) is one of the best stocks from Caxton Associates’ Q3 portfolio.
9. Phillips 66 (NYSE:PSX)
Caxton Associates’ Stake Value: $980,000
Percentage of Caxton Associates’ 13F Portfolio: 0.10%
Number of Hedge Fund Holders: 34
Phillips 66 (NYSE:PSX) is a Texas-based multinational energy company, dealing in natural gas, petrochemicals, aviation fuels, motor fuels, lubricants, oil refining, and service stations. Caxton Associates acquired 14,000 Phillips 66 (NYSE:PSX) shares in the third quarter, worth $980,000. The energy stock accounts for 0.10% of the firm’s total Q3 securities.
Announcing its third quarter financial results on October 29, Phillips 66 (NYSE:PSX) reported earnings per share of $3.19, exceeding estimates by $1.26. Revenue over the period jumped 93.09% year-over-year, totaling $31.47 billion, outperforming estimates by $6.55 billion.
Cowen analyst Jason Gabelman raised the price target on Phillips 66 (NYSE:PSX) to $78 from $77 and kept a Market Perform rating on the shares on December 28.
A total of 34 hedge funds were bullish on Phillips 66 (NYSE:PSX) in the third quarter, up from 26 funds in the preceding quarter. D E Shaw is the largest Phillips 66 (NYSE:PSX) stakeholder as of Q3, with a $138.7 million position in the company.
8. Gulfport Energy Corporation (NYSE:GPOR)
Caxton Associates’ Stake Value: $1,088,000
Percentage of Caxton Associates’ 13F Portfolio: 0.12%
Number of Hedge Fund Holders: 18
Caxton Associates increased its stake in Gulfport Energy Corporation (NYSE:GPOR) by 231% in the third quarter, holding 13,233 shares worth $1.08 million. Gulfport Energy Corporation (NYSE:GPOR) is a natural gas, crude oil, and natural oil liquids company based in Oklahoma.
Truist analyst Neal Dingmann on October 7 raised the price target on Gulfport Energy Corporation (NYSE:GPOR) to $120 from $94 and kept a Buy rating on the shares as part of a broader research note on the energy sector.
On November 2, Gulfport Energy Corporation (NYSE:GPOR) reported its Q3 results. The company announced earnings per share of $3.50, missing estimates by $0.35.
Silver Point Capital is the largest Gulfport Energy Corporation (NYSE:GPOR) stakeholder as of September 2021, with 8.20 million shares of the company, worth $674.7 million. Overall, 18 hedge funds were long Gulfport Energy Corporation (NYSE:GPOR) in Q3, with stakes valued at $885.1 million.
Here is what Greenlight Capital has to say about Gulfport Energy Corporation (NYSE:GPOR) in its Q2 2021 investor letter:
“Thermal Coal and Natural Gas
ESG investing is inflationary, as green energy is simply more expensive than hydrocarbons. Hydrocarbon energy companies are starved for capital and are being told to change their ways. The result is less exploration and drilling. Even with benchmark oil prices surging over the last year, companies are loath to drill more. Normally, the cure for high prices is high prices. With ESG in the proverbial driver’s seat, we might need much higher prices still
in order to increase investment to meet demand.
There is almost nothing less popular than thermal coal. From 2011 to 2020, U.S. coal production declined by 51%. U.S. demand has fallen as we’ve shifted to alternative sources of electricity. As unpopular as coal is though, it still makes up about 20% of U.S. electricity generation. Globally, coal demand is growing modestly as China and India add power generation capacity faster than the West is reducing it. Even so, reduced oil and gas drilling has caused natural gas prices to advance and coal prices are following. Seaborne thermal coal prices are up 140% year-over-year and at the highest levels since 2011, and Northern Appalachia thermal coal prices are catching up, rising 23% in the last month alone.
We also own Gulfport Energy (GPOR), an Appalachian natural gas driller that recently emerged from bankruptcy and is poised to benefit from higher natural gas prices. Currently, there are no analyst estimates for GPOR.”
7. PBF Energy Inc. (NYSE:PBF)
Caxton Associates’ Stake Value: $1,435,000
Percentage of Caxton Associates’ 13F Portfolio: 0.15%
Number of Hedge Fund Holders: 18
PBF Energy Inc. (NYSE:PBF) is one of the best energy stocks from Caxton Associates’ 13F portfolio, with the hedge fund boosting its position in the company by 43% during the third quarter, owning a total of 110,623 shares worth $1.43 million. PBF Energy Inc. (NYSE:PBF) is a petroleum refining company, providing products including transportation fuels, motor oils, and lubricants.
In the third quarter earnings report, posted on October 29, PBF Energy Inc. (NYSE:PBF) announced earnings per share of $0.12, beating estimates by $0.15. The revenue jumped almost 96% year-over-year to $7.19 billion, outperforming estimates by $745.63 million.
Cowen analyst Jason Gabelman on December 28 lowered the price target on PBF Energy Inc. (NYSE:PBF) to $14 from $16 and kept a Market Perform rating on the shares.
Among the hedge funds being tracked by Insider Monkey, 18 funds reported owning stakes in PBF Energy Inc. (NYSE:PBF) in the third quarter, worth $68.4 million, as compared to 17 funds in the prior quarter, holding stakes in PBF Energy Inc. (NYSE:PBF) amounting to $80.9 million.
John Overdeck and David Siegel’s Two Sigma Advisors is the largest PBF Energy Inc. (NYSE:PBF) stakeholder, with 1.72 million shares worth $22.3 million.
6. NextEra Energy, Inc. (NYSE:NEE)
Caxton Associates’ Stake Value: $1,585,000
Percentage of Caxton Associates’ 13F Portfolio: 0.17%
Number of Hedge Fund Holders: 53
NextEra Energy, Inc. (NYSE:NEE) is an American company offering energy development, renewable energy, and electric power generation and distribution across the United States and Canada. Caxton Associates owns 20,180 NextEra Energy, Inc. (NYSE:NEE) shares, worth $1.58 million, representing 0.17% of the fund’s total Q3 securities.
In the third quarter earnings report published on October 20, NextEra Energy, Inc. (NYSE:NEE) posted earnings per share of $0.75, beating estimates by $0.03. The $4.37 billion revenue missed estimates by $1.03 billion.
BMO Capital analyst James Thalacker raised the price target on NextEra Energy, Inc. (NYSE:NEE) to $98 from $89 and kept an Outperform rating on the shares, stating that NextEra Energy, Inc. (NYSE:NEE)’s “industry-leading” profile within a sector that includes “one of the world’s largest renewable backlogs” makes the stock a “core holding” for investors.
Billionaire Ken Fisher’s Fisher Asset Management is the biggest NextEra Energy, Inc. (NYSE:NEE) stakeholder at the end of Q3 2021, with 14.5 million shares worth $1.14 billion.
In addition to Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Netflix, Inc. (NASDAQ:NFLX), NextEra Energy, Inc. (NYSE:NEE) is a top stock pick of Caxton Associates as of September 2021.
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Disclosure: None. 10 Energy Stocks to Buy According to Billionaire Bruce Kovner’s Caxton Associates is originally published on Insider Monkey.
