In this article, we present the list of the 10 oil and gas stocks to buy according to Ken Fisher. You can skip our comprehensive analysis of the Russia-Ukraine war and its effect on the oil industry, and go directly to 5 Oil and Gas Stocks to Buy According to Ken Fisher .
The Russia-Ukraine war continues to rattle the energy markets all over the world. As of March 5, Brent crude touched $118 per barrel. IHS Markit’s Vice Chairman and famous energy author Daniel Yergin recently warned that the world’s oil markets could be headed for a crisis similar to the one faced in the 1970s. Yergin reminded that Russia exports about 7.5 million barrels of oil daily
“This is a supply crisis. It’s a logistics crisis. It’s a payment crisis, and this could well be on the scale of the 1970s,” Yergin said.
Yergin has written and co-authored several books, including the Pulitzer Prize-winning The Prize: The Epic Quest for Oil, Money, and Power, The Quest: Energy, Security, and the Remaking of the Modern World, and The New Map: Energy, Climate, and the Clash of Nations.
Ken Fisher’s Thoughts on Russia-Ukraine War
As investors scramble to make sense of the volatile energy markets, now is the right time to see what the smart money says about energy stocks. Ken Fisher, whose net worth stands at about $3.7 billion, recently shared his thoughts on the Russia-Ukraine war in a column.
Fisher is optimistic about the financial markets. He doesn’t believe we are in a bear market.
About the war, Fisher believes things will not go out of control.
“Ukraine isn’t in NATO. This will not become what most fear, beyond regional. The outcomes here must be far worse than current fears, which are in the marketplace and have been, to create a bear market. Russia invading a NATO country or China invading Taiwan would hurt both invaders far more than help them. Stupid they may be, but not that stupid (although I’ve seen no sign China is stupid–I believe Putin is for invading Ukraine),” wrote Fisher.
Amid the rising oil prices, some notable oil stocks currently making big moves include Exxon Mobil Corp (NYSE: XOM), BP plc (NYSE: BP), Chevron Corporation (NYSE: CVX) and Shell PLC (NYSE: SHEL). In this article, however, we will take a look at the oil and gas stocks in Ken Fisher’s portfolio. We used the billionaire fourth quarter portfolio for this analysis.
10 Oil and Gas Stocks to Buy According to Ken Fisher
10. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 51
Ken Fisher’s fourth-quarter portfolio shows that his hedge fund owned close to 4 million shares of Devon Energy Corporation (NYSE:DVN) as of the end of the fourth quarter of 2021. The total worth of these shares was over $175 million. Recently, Devon Energy Corporation (NYSE:DVN) was downgraded by Benchmark Research on the back of valuation concerns. However, hedge funds continue to remain bullish on Devon Energy Corporation (NYSE:DVN) stock.
As of the end of the fourth quarter, 51 hedge funds of the 924 tracked by Insider Monkey held stakes in the company. Devon Energy Corporation (NYSE:DVN) also features on our list of the energy stock picks of Joe Huber’s hedge fund.
In addition to Devon, some other notable stock picks of famous hedge funds include Exxon Mobil Corp (NYSE: XOM), BP plc (NYSE: BP), Chevron Corporation (NYSE: CVX) and Shell PLC (NYSE: SHEL).
9. TotalEnergies SE (NYSE:TTE)
Number of Hedge Fund Holders: 17
TotalEnergies SE (NYSE:TTE) is a French oil and gas company that is involved in the exploration and production of fuels, natural gas, and low carbon electricity. Ken Fisher’s hedge fund has a $1.2 billion stake in TotalEnergies SE (NYSE:TTE) as of the end of 2021. TotalEnergies SE (NYSE:TTE) is in the news after it condemned Russia’s invasion of Ukraine and said that it will no longer invest in new projects in Russia. However, the company did not announce to close its existing operations in the country. TotalEnergies SE (NYSE:TTE) owns about 20% of Russia’s natural gas producer Novatek, and a 20% interest in the Yamal LNG project.
John Paulson’s hedge fund also owns a $22 million stake in TotalEnergies SE (NYSE:TTE) as of the end of the fourth quarter of 2021.
8. Marathon Oil Corporation (NYSE:MRO)
Number of Hedge Fund Holders: 40
Texas-based Marathon Oil Corporation (NYSE:MRO) is involved in hydrocarbon exploration. Ken Fisher’s hedge fund entered 2022 with a $140 million stake in Marathon Oil Corporation (NYSE:MRO). Last month, Piper Sandler upgraded Marathon Oil Corporation (NYSE:MRO) to Buy and upped its price target for the stock to $27. Scotia also gave a bullish rating to the stock on the back of upbeat earnings and the company’s plan to focus on production growth.
Of the 924 hedge funds tracked by Insider Monkey, 40 were long Marathon Oil Corporation (NYSE:MRO) as of the end of the fourth quarter of 2021. DE Shaw has a $119 million stake in Marathon Oil Corporation (NYSE:MRO).
MRO is one of the stocks making moves amid the Russia’s attack on Ukraine, in addition to Exxon Mobil Corp (NYSE: XOM), BP plc (NYSE: BP), Chevron Corporation (NYSE: CVX) and Shell PLC (NYSE: SHEL).
7. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 41
Shell plc (NYSE:SHEL) is currently in the spotlight as the company became one of the first oil companies to buy oil from Russia after the country’s invasion of Ukraine. Shell plc (NYSE:SHEL) reportedly bought a cargo of Russian Urals crude at a $28.5 per barrel discount to Brent prices. Shell plc (NYSE:SHEL) stock is down 5.3% over the last five days, as of March 5. Ken Fisher’s hedge fund owns an $813 million stake in Shell plc (NYSE:SHEL) as of the end of the fourth quarter.
RBC recently calculated that net earnings from Shell plc (NYSE:SHEL)’s 27.5% stake in the Sakhalin-II LNG project in Russia and its 50% stake in the Salym petroleum development totaled $700 million in 2021. This accounts for about 4% of the total earnings of Shell plc (NYSE:SHEL).
Goehring & Rozencwajg Associates, an investment management firm, published its “Natural Resource Market Commentary” third-quarter 2021 investor letter and mentioned Shell plc (NYSE:SHEL). Here‘s what the fund said:
“Royal Dutch Shell’s ESG challenges continue unabated. A Dutch court ruled in May that Royal Dutch Shell must cut its CO2 output by 45% by 2030 to align their policies with the Paris Climate Accord. In a statement issued after the verdict, a Shell plc (NYSE:SHEL) spokesperson acknowledged that “urgent action is needed on climate change and the company is accelerating efforts to reduce emissions.” If the pressure from the Dutch court system was not enough, an activist shareholder has proposed breaking the company apart to address ESG concerns. On October 27th, Third Point Management announced the following.
“If Shell plc (NYSE:SHEL) pursues this type of strategy it would probably lead to an acceleration of carbon dioxide reduction. […] Breaking Shell into two operating units would create a standalone legacy energy business (upstream, refining, and chemicals) that could slow capex beyond what is has already promised, sell assets, and prioritize return of cash to shareholder which can be reallocated into low-carbon areas of the market.”
Shell has already cut spending dramatically over the last decade. After having peaked at $39 bn in 2013, upstream capital spending fell to only $17 bn in 2020 – a drop of nearly 60%. Spending has barely recovered in the three quarters of 2021. A lack of spending has already impacted production. Proforma for the 2016 acquisition of BG Group, Shell plc (NYSE:SHEL) ’s total production has fallen 13% since capital spending peaked in 2013. These trends are accelerating: Shell’s production over the first nine months of 2021 have fallen 7% compared with the same period last year.
If Royal Dutch Shell’s upstream capital spending remains at today’s depressed levels, we estimate the company will only be able to replace 30% of production with new reserves and that production will fall 40% over the next nine years. If spending is further curtailed (as is being proposed), Shell’s oil and natural gas production would collapse – something that may have already started.”
6. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 53
As of the end of December 2021, Ken Fisher reported owning about 6.6 million shares of Chevron Corporation (NYSE:CVX), worth $774.21 million. Chevron Corporation (NYSE:CVX) is an extremely popular oil stock among elite hedge funds. Our data shows that 51 hedge funds had positions in Chevron Corporation (NYSE:CVX) as of the end of the last quarter of 2021, compared to 51 funds in the previous quarter.
Warren Buffett’s Berkshire Hathaway is the leading shareholder of the company with a $4.5 billion stake.
Click to continue reading and see 5 Oil and Gas Stocks to Buy According to Ken Fisher.
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Disclosure: None. 10 Oil and Gas Stocks to Buy According to Ken Fisher is originally published on Insider Monkey.
