In this article, we discuss 10 energy stocks to buy according to Joe Huber’s Huber Capital Management. If you want to skip our detailed analysis of these stocks, go directly to 5 Energy Stocks to Buy According to Joe Huber’s Huber Capital Management.
Joe Huber is the chief executive officer and chief investment officer of Huber Capital Management, which is an investment advisory firm based in California, providing its expertise to diverse clients including institutional investors, wealthy individuals, and mutual funds. Joe Huber manages assets under management of $328.93 million, and a 13F portfolio worth $387.1 million as per the 13F filings from Q3 2021.
Huber Capital Management’s third quarter investments are concentrated in the finance, healthcare, information technology, industrials, energy, and consumer discretionary sectors, with the top ten holdings comprising 41.62% of the fund’s total 13F securities. In Q3 2021, Joe Huber made additional purchases in 31 stocks, sold off shares entirely in 1 company, and reduced holdings in 51 securities.
The top buys at Huber Capital Management include JAKKS Pacific, Inc. (NASDAQ:JAKK), Enova International, Inc. (NYSE:ENVA), and The Gap, Inc. (NYSE:GPS). Whereas, the fund reduced holdings in Golar LNG Limited (NASDAQ:GLNG), TETRA Technologies, Inc. (NYSE:TTI), and Carter’s, Inc. (NYSE:CRI).
The most notable stocks in the third quarter portfolio of Huber Capital Management include Microsoft Corporation (NASDAQ:MSFT), Bank of America Corporation (NYSE:BAC), and Mastercard Incorporated (NYSE:MA).
Joe Huber of Huber Capital Management
Our Methodology
We used the Q3 portfolio of Joe Huber’s Huber Capital Management for this analysis, selecting the top energy stock picks of the hedge fund. The stocks are ranked according to the stake value of Huber Capital Management in each holding.
Energy Stocks to Buy According to Joe Huber’s Huber Capital Management
10. Black Hills Corporation (NYSE:BKH)
Huber Capital Management’s Stake Value: $874,000
Percentage of Huber Capital Management’s 13F Portfolio: 0.22%
Number of Hedge Fund Holders: 16
Headquartered in South Dakota, Black Hills Corporation (NYSE:BKH) is a diversified energy company that supplies electricity and gas throughout South Dakota, Montana, Wyoming, Colorado, Arkansas, Kansas, Nebraska, and Iowa. Huber Capital Management owns 13,926 Black Hills Corporation (NYSE:BKH) shares as of Q3 2021, worth $874,000, representing 0.22% of the fund’s 13F investments for the period.
On January 26, Black Hills Corporation (NYSE:BKH) declared a $0.595 per share quarterly dividend, in line with its prior dividend payout. It is distributable on March 1, to shareholders of record on February 14. Black Hills Corporation (NYSE:BKH) has a solid dividend history, and the company has consistently raised its dividends for 51 years.
Mizuho analyst Paul Fremont on February 7 upgraded Black Hills Corporation (NYSE:BKH) to Buy from Neutral with an unchanged price target of $71. The current valuation provides a “free option” if the company decides to transition its business mix away from gas, while avoiding equity issuance in the process, the analyst told investors in a research note, citing the stock’s valuation for the upgrade.
Among the hedge funds tracked by Insider Monkey in Q3 2021, 16 hedge funds were bullish on Black Hills Corporation (NYSE:BKH), with stakes equaling $55.9 million, as compared to 14 funds holding stakes worth $62.5 million in Black Hills Corporation (NYSE:BKH) in the previous quarter. Mario Gabelli’s GAMCO Investors held the largest stake in Black Hills Corporation (NYSE:BKH) in the third quarter of 2021, with 201,491 shares valued at $12.6 million.
In addition to Microsoft Corporation (NASDAQ:MSFT), Bank of America Corporation (NYSE:BAC), and Mastercard Incorporated (NYSE:MA), Black Hills Corporation (NYSE:BKH) is a notable stock from the third quarter portfolio of Huber Capital Management.
9. Exelon Corporation (NASDAQ:EXC)
Huber Capital Management’s Stake Value: $1,239,000
Percentage of Huber Capital Management’s 13F Portfolio: 0.32%
Number of Hedge Fund Holders: 36
Exelon Corporation (NASDAQ:EXC) is a Chicago-based producer of electric power and natural gas, providing its services in 48 states, the District of Columbia, and Canada. Exelon Corporation (NASDAQ:EXC) is one of the leading American electric companies, with revenue for the third quarter of 2021 totaling $8.91 billion, clocking in above market consensus.
In the third quarter of 2021, Joe Huber’s fund held 25,633 Exelon Corporation (NASDAQ:EXC) shares, worth $1.23 million, representing 0.32% of Huber Capital Management’s total 13F securities.
Barclays analyst Eric Beaumont reinstated coverage of Exelon Corporation (NASDAQ:EXC) on February 7 with an Equal Weight rating and a $46 price target. According to the analyst, Exelon Corporation (NASDAQ:EXC) is now a pure regulated transmission and distribution company, which will result in more stable and predictable earnings and growth. The analyst’s neutral rating reflects the stock’s current risk/reward opportunity.
On February 2, Exelon Corporation (NASDAQ:EXC) shares dropped 28.2% in pre-market trading as the company announced the completion of the separation of Constellation Energy Corporation (NASDAQ:CEG), its former power generation and competitive energy business.
According to the hedge funds monitored by Insider Monkey in Q3 2021, 36 funds were bullish on Exelon Corporation (NASDAQ:EXC), with stakes totaling $1.10 billion. Adage Capital Management is the largest stakeholder of the company as of the third quarter, with 1.8 million shares worth $89.2 million.
Here is what ClearBridge Global Infrastructure Value Strategy has to say about Exelon Corporation (NASDAQ:EXC) in its Q3 2021 investor letter:
“Turning to the U.S. and Canada region, U.S. electric utility Exelon performed well during the quarter. Exelon is a U.S. energy provider with one of the cleanest and lowest-cost power generation fleets. Its utilities serve millions of electric and gas customers across Delaware, Illinois, Maryland, New Jersey, Pennsylvania and the District of Columbia. The share price of Exelon benefited from rising power prices and potential federal support for nuclear energy.”
8. Devon Energy Corporation (NYSE:DVN)
Huber Capital Management’s Stake Value: $1,300,000
Percentage of Huber Capital Management’s 13F Portfolio: 0.33%
Number of Hedge Fund Holders: 48
Devon Energy Corporation (NYSE:DVN) is a company based in Oklahoma, engaged in hydrocarbon exploration, petroleum, natural gas, and natural gas liquids. Huber Capital Management owns 36,600 Devon Energy Corporation (NYSE:DVN) shares as of Q3 2021, worth $1.30 million, accounting for 0.33% of the fund’s total 13F investments.
Goldman Sachs analyst Neil Mehta downgraded Devon Energy Corporation (NYSE:DVN) on January 21 to Neutral from Buy with a price target of $52, up from $46. The analyst cited valuation for the downgrade, following the stock’s relative and absolute outperformance in 2021. He now sees limited upside to Devon Energy Corporation (NYSE:DVN) shares relative to peers.
On December 8, Devon Energy Corporation (NYSE:DVN) declared a $0.84 per share quarterly dividend, which is a 71.4% increase from its prior dividend of $0.49. The dividend was paid on December 30, to shareholders of record on December 10.
In Q3 2021, 48 hedge funds were bullish on Devon Energy Corporation (NYSE:DVN), with stakes totaling $1.40 billion, as compared to 50 funds in the quarter earlier, holding stakes worth $1.03 billion in Devon Energy Corporation (NYSE:DVN).
Rajiv Jain’s GQG Partners elevated its position in Devon Energy Corporation (NYSE:DVN) by 87103% in the third quarter, holding roughly 14 million shares worth approximately $494 million. GQG Partners is the biggest Devon Energy Corporation (NYSE:DVN) stakeholder.
Here is what GoodHaven Capital Management has to say about Devon Energy Corporation (NYSE:DVN) in their Q4 2020 investor letter:
“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.”
7. National Fuel Gas Company (NYSE:NFG)
Huber Capital Management’s Stake Value: $2,495,000
Percentage of Huber Capital Management’s 13F Portfolio: 0.64%
Number of Hedge Fund Holders: 19
National Fuel Gas Company (NYSE:NFG) is a New York-based energy company that provides natural gas and oil to industrial, commercial, and residential users located in New York and Pennsylvania. Joe Huber, via Huber Capital Management, boosted his stake in National Fuel Gas Company (NYSE:NFG) in Q3 2021, holding 47,500 shares worth $2.49 million, representing 0.64% of the Q3 investments.
Publishing its Q4 results on February 3, National Fuel Gas Company (NYSE:NFG) posted earnings per share of $1.48, beating estimates by $0.15. Revenue over the period increased roughly 24% year-over-year to $546.56 million, outperforming estimates by $3.07 million.
BofA analyst John Abbott reinstated coverage of National Fuel Gas Company (NYSE:NFG) on January 10 with an Underperform rating and a $66 price target. National Fuel Gas Company (NYSE:NFG)’s position as a diversified energy company with four segments limits it upside since he prefers higher beta “oil” names for the increased exposure to what he sees as a more constructive outlook versus U.S. gas, the analyst told investors in a research note.
On December 3, National Fuel Gas Company (NYSE:NFG) declared a quarterly dividend of $0.455 per share, in line with previous. The dividend was paid on January 14, to shareholders of record on December 31.
Billionaire Ken Griffin’s Citadel Investment Group is the biggest National Fuel Gas Company (NYSE:NFG) stakeholder as of Q3 2021, with 488,387 shares worth $25.65 million. Overall, 19 hedge funds were long National Fuel Gas Company (NYSE:NFG) in the third quarter, up from 12 funds in the quarter earlier.
Here is what Heartland Value Fund has to say about National Fuel Gas Company (NYSE:NFG) in its Q1 2021 investor letter:
“The ho-hum Utilities sector isn’t typically a place to hunt for strong growth prospects. However, for investors willing to do their homework, opportunities do exist. Portfolio holding National Fuel Gas Company (NFG) is a prime example.
NFG is a dividend aristocrat—50 consecutive years of dividend increases. Although the business is lumped in with run-of-the-mill power companies, it is much more diverse. In addition to its utility operations, a pipeline and storage division produces almost a quarter of its profits, and the company generates nearly 40% of its bottom line from natural gas exploration and production.
Shares of NFG are trading at a mid-teens discount to their historic average based on price/book. Given the state of the energy industry over the past few years, we believe the company’s gas unit could be an overlooked source of growth. Additionally, the utility recently received regulatory approval on a natural gas pipeline expansion in Pennsylvania, which is expected to produce a windfall in free cash flow.”
6. Entergy Corporation (NYSE:ETR)
Huber Capital Management’s Stake Value: $3,107,000
Percentage of Huber Capital Management’s 13F Portfolio: 0.80%
Number of Hedge Fund Holders: 30
Entergy Corporation (NYSE:ETR) is a diversified energy company that supplies carbon and carbon-free energy sources, electric power, and natural gas to residential and commercial customers across Arkansas, Louisiana, Mississippi, and Texas. Huber Capital Management owns a $3.10 million stake in Entergy Corporation (NYSE:ETR) as of the close of the third quarter of 2021, which accounts for 0.80% of the fund’s 13F portfolio.
On January 28, Entergy Corporation (NYSE:ETR) declared a quarterly dividend of $1.01 per share, in line with previous. The dividend is payable on March 1, to shareholders of record on February 11.
Vertical Research analyst Jonathan Arnold on January 10 downgraded Entergy Corporation (NYSE:ETR) to Hold from Buy with a $117 price target.
In Q3 2021, 30 hedge funds held long positions in Entergy Corporation (NYSE:ETR), down from 31 funds in the quarter earlier. Zimmer Partners is a prominent shareholder of Entergy Corporation (NYSE:ETR) as of the third quarter, elevating its position in the stock by 227%, holding 653,200 shares worth $64.8 million.
Just like Microsoft Corporation (NASDAQ:MSFT), Bank of America Corporation (NYSE:BAC), and Mastercard Incorporated (NYSE:MA), hedge funds are piling into Entergy Corporation (NYSE:ETR).
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Disclosure: None. 10 Energy Stocks to Buy According to Joe Huber’s Huber Capital Management is originally published on Insider Monkey.
