In this article, we discuss the 10 energy stocks to buy according to Steve Pattyn’s Yaupon Capital based on Q2 holdings of the fund. If you want to skip our detailed analysis of Pattyn’s history, investment philosophy, and hedge fund performance, go directly to the 5 Energy Stocks to Buy According to Steve Pattyn’s Yaupon Capital.
Steve Pattyn, the founder of Yaupon Capital, acquired his Bachelor’s degree from Rice University. Later, he joined Morgan Stanley as an analyst. He also worked at Och-Ziff Capital Management as the Managing Director. Currently, he is a Managing Member at Yaupon Capital.
Yaupon Capital was established in 2018. The hedge fund invests in renewable energy, traditional energy, and utilities across the whole energy value chain. Yaupon’s investments are a dynamic mix of concentrated core and diversified theme positions based on macro, sector, and company-specific research.
The energy industry was the best-performing sector in the first half of 2021. Nine of the 11 S&P 500 sectors were down in September, with the utility sector being the worst impacted (-7.3%). The energy sector, which returned 14.3% for the month, was the standout performer in September.
As of the second quarter, Yaupon Capital holds significant stakes in several energy companies, including Marathon Petroleum Corporation (NYSE:MPC), Suncor Energy Inc. (NYSE:SU), and Cimarex Energy Co. (NYSE:XEC).
Based on the 13F holdings for the second quarter of 2021, Yaupon Capital owns 50,000 shares in Marathon Petroleum Corporation (NYSE:MPC). On November 2, Raymond James analyst Justin Jenkins raised his price target on Marathon Petroleum to $85 from $75 and kept a “Strong Buy” rating on the shares.
Steve Pattyn’s Yaupon Capital is bullish on the Canadian energy company Suncor Energy Inc. (NYSE:SU). He increased his stake in the company by 63% in the second quarter, ending the period with 290,200 shares of the company, worth $6.95 million. On November 2, Credit Suisse analyst Manav Gupta raised his price target on Suncor to C$42 from C$36 and kept an “Outperform” rating on the shares.
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Here are the 10 energy stocks to buy according to Steve Pattyn’s Yaupon Capital. We picked these energy stocks from Pattyn’s 13F portfolio for Q2 2021 for this analysis.
Energy Stocks to Buy According to Steve Pattyn’s Yaupon Capital
10. Brigham Minerals, Inc. (NYSE:MNRL)
Yaupon Capital Stake Value: $68,000
Percentage of Yaupon Capital’s 13F Portfolio: 0.03%
Number of Hedge Fund Holders: 14
Brigham Minerals, Inc. (NYSE:MNRL) specializes in purchasing and managing mineral and royalty interests. Under a formal purchase and sale agreement, Brigham Minerals agreed to buy specific mineral and royalty interests in the DJ Basin for $44 million in cash and 2.2 million shares. On November 3, Brigham Minerals, Inc. (NYSE:MNRL) posted third-quarter revenue of $41.96 million, up 81.8% YoY. In addition, the company’s EPS came in at $0.31, beating the analysts’ expectations by $0.04.
Brigham Minerals, Inc. (NYSE:MNRL) declared a quarterly dividend of $0.35 per share on August 18, up 9.4% from the previous $0.32. In addition to dividends, the company’s share price rallied more than 87% in the last twelve months. In October, Piper Sandler analyst Pearce Hammond raised his price target on Brigham Minerals, Inc. (NYSE:MNRL) to $24 from $20 and kept an “Overweight” rating on the shares.
Yaupon Capital first initiated a position in Brigham Minerals, Inc. (NYSE:MNRL) during the first quarter of 2021. MNRL position currently accounts for 0.03% of the overall portfolio. At the end of the second quarter of 2021, 14 hedge funds in the database of Insider Monkey held stakes worth $96.46 million in Brigham Minerals, up from 13 the preceding quarter worth $54.35 million.
Just like Marathon Petroleum Corporation (NYSE:MPC), Suncor Energy Inc. (NYSE:SU), and Cimarex Energy Co. (NYSE: XEC), Brigham Minerals, Inc. (NYSE:MNRL) is one of the energy stocks attracting the attention of Steve Pattyn’s Yaupon Capital.
9. Clean Energy Fuels Corp. (NASDAQ:CLNE)
Yaupon Capital Stake Value: $508,000
Percentage of Yaupon Capital’s 13F Portfolio: 0.28%
Number of Hedge Fund Holders: 17
Clean Energy Fuels Corp. (NASDAQ:CLNE) stock has returned 57% to investors in the past twelve months. The company provides natural gas for automobile fueling. In addition, Clean Energy Fuels Corp. (NASDAQ:CLNE) stated that it is strengthening its renewable natural gas joint venture with BP to fund and develop new projects on American dairy farms.
On November 4, Clean Energy Fuels Corp. (NASDAQ:CLNE) posted operating results for the third quarter of 2021. It reported revenue of $86.1 million, up 21.5% YoY, beating the estimates by $0.61 million.
In addition, Yaupon Capital increased its stake in Clean Energy Fuels Corp. (NASDAQ:CLNE) by 101% in the second quarter of 2021. The hedge fund holds 50,000 shares in the company worth $508,000, representing 0.28% of their portfolio.
Out of the hedge funds being tracked by Insider Monkey, Warren Lammert’s Granite Point Capital is a leading shareholder in Clean Energy Fuels Corp. (NASDAQ:CLNE), with 180,000 shares worth more than $1.47 million.
8. Plains GP Holdings, L.P. (NASDAQ:PAGP)
Yaupon Capital Stake Value: $1,803,000
Percentage of Yaupon Capital’s 13F Portfolio: 0.99%
Number of Hedge Fund Holders: 15
Plains GP Holdings, L.P. (NASDAQ:PAGP) is a private equity business based in the United States and Canada that owns and maintains midstream energy infrastructure. On November 2, the company posted third-quarter 2021 results. Plains GP Holdings, L.P. (NASDAQ:PAGP) had an EPS of $0.22, missing estimates by $0.02. The company’s revenue was $10.78 billion, up 84.9% year over year, beating the forecast by $2.1 billion.
In October, Seaport Global analyst Sunil Sibal downgraded Plains GP Holdings, L.P. (NASDAQ:PAGP) to “Neutral” from “Buy.” Sibal advises investors that the Permian basin’s overbuilt crude pipeline infrastructure is expected to remain underutilized by midstream firms.
Plains GP Holdings, L.P. (NASDAQ:PAGP) accounts for about 0.99% of Yaupon Capital’s portfolio, as the hedge fund owns a $1.80 million stake in the company. Out of the hedge funds being tracked by Insider Monkey Prescott Group Capital Management is a leading shareholder in Plains GP Holdings, L.P. (NASDAQ:PAGP) with 189,439 shares worth $2.04 million.
7. Marathon Petroleum Corporation (NYSE:MPC)
Yaupon Capital Stake Value: $3,021,000
Percentage of Yaupon Capital’s 13F Portfolio: 1.67%
Number of Hedge Fund Holders: 48
Marathon Petroleum Corporation (NYSE:MPC) is a privately owned refinery that supplies gasoline and distillates to customers and merchants. The company shares gained 58.90% in the past twelve months and 51.61% year to date.
On November 2, Marathon Petroleum Corporation (NYSE:MPC) posted third-quarter 2021 results. The company’s EPS came in at $0.73, which was $0.03 more than expected. The consolidated revenue of $32.61 billion also presented an 85.8% year-over-year growth. In October, Marathon Petroleum Corporation’s (NYSE:MPC) board announced a quarterly dividend of $0.58 per share, in line with the previous.
Hedge fund sentiment increased for Marathon Petroleum Corporation (NYSE:MPC) in the second quarter. Insider Monkey’s data shows that 48 elite hedge funds held stakes in Marathon Petroleum Corporation (NYSE:MPC) at the end of the second quarter, up from 46 funds a quarter earlier.
6. Devon Energy Corporation (NYSE:DVN)
Yaupon Capital Stake Value: $4,062,000
Percentage of Yaupon Capital’s 13F Portfolio: 2.24%
Number of Hedge Fund Holders: 50
Devon Energy Corporation (NYSE:DVN) is engaged in producing oil and natural gas properties. The hedge fund increased its hold in the company by 37% in the second quarter, ending the period with 139,156 shares.
On November 9, Argus analyst Bill Selesky raised his price target on Devon Energy Corporation (NYSE:DVN) to $53 from $32 and maintained a “Buy” rating on the shares. In November, Devon Energy Corporation reported financial results for the third quarter of 2021. EPS in the period came in at $1.08, surpassing the estimates by $0.15.
Along with Marathon Petroleum Corporation (NYSE:MPC), Suncor Energy Inc. (NYSE:SU), and Cimarex Energy Co. (NYSE:XEC), Devon Energy Corporation is one of the energy stocks to buy according to Steve Pattyn’s Yaupon Capital.
GoodHaven Capital Management, in its fourth-quarter 2020 investor letter, mentioned Devon Energy Corporation (NYSE:DVN). Here is what the fund said:
“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.”
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Disclosure: None. 10 Energy Stocks to Buy According to Steve Pattyn’s Yaupon Capital is originally published on Insider Monkey.
