In this article, we examined Ken Fisher’s portfolio management strategy and approach to investing in oil stocks. We also reviewed the top oil stocks in billionaire Ken Fisher’s portfolio. You can skip our detailed discussion about Ken Fisher’s investment philosophy and portfolio management strategies and jump directly to 5 Oil Stocks in Billionaire Ken Fisher’s Portfolio.
The success of billionaire Ken Fisher’s hedge fund over the past 40 years has made him one of Wall Street’s legends. He is the heart and soul of Fisher Asset Management, which he founded in 1979. His successful portfolio management strategies have helped his hedge fund to become one of the world’s largest investment firms with $159 billion in assets as of September 2021. Ken Fisher is also a popular columnist and the author of eleven books on investing.
Forbes Magazine estimated in 2015 that Mr. Fisher had outperformed the market by an average of 4.2 percentage points per year over the previous 18 years. Fisher Asset Management also generated robust returns for investors in 2020 amid its bets on fast-growing tech stocks from the information technology, communication, and consumer discretionary sectors.
In 2021, he shifted his focus to sectors that are likely to benefit from economic reopening. His investments in the energy sector and particularly oil stocks added to his hedge fund’s performance this year. The energy sector, which was among the laggards in 2020, grew double than the broader market index growth of around 25% so far this year. Oil stocks were among the biggest gainers due to the sharp growth in oil prices.
Despite Omicron-related concerns, the outlook for oil demand and economic growth remains favorable. According to Goldman Sachs, oil prices will likely remain high for a long time. The investment bank sees robust growth in oil demand in the years to come while also noting a lack of drilling activity, which is clearly a risk to its forecast for Brent oil to average $85 per barrel in the coming years.
The most notable oil stocks in billionaire Ken Fisher’s portfolio include Marathon Oil Corporation (NYSE:MRO), Devon Energy Corporation (NYSE:DVN), Hess Corporation (NYSE:HES), BP p.l.c. (NYSE:BP) and ConocoPhillips (NYSE:COP).
Dependable oil stocks like Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) have been members of billionaire Ken Fisher’s portfolio over the years. In fact, his firm added to its existing position in Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) in the past three consecutive quarters, according to data tracked by Insider Monkey.
As of September, Fisher Asset Management held $516 million worth of stake in Exxon Mobil Corporation (NYSE:XOM) and a $634 million position in Chevron Corporation (NYSE:CVX).
Our Methodology:
We used Fisher Asset Management’s 13F portfolio for the third quarter to identify these top oil stocks.
Ken Fisher of Fisher Asset Management
10 Oil Stocks in Billionaire Ken Fisher’s Portfolio
10. Marathon Oil Corporation (NYSE:MRO)
Fisher Asset Management’s Stake Value: $101 million
Percentage of Fisher Asset Management’s 13F Portfolio: 0.06%
Number of Hedge Fund Holders: 40
Fisher Asset Management’s strategy of raising its stake in Marathon Oil Corporation (NYSE:MRO) in the past three quarters appears to be working. Shares of Marathon Oil Corporation (NYSE:MRO) rallied 122% so far this year. In addition to share price gains, Marathon Oil Corporation (NYSE:MRO) offers a dividend yield of 1.15%, which makes it a good stock to hold for the long term.
The company’s financial numbers and future fundamentals are supporting shareholders’ returns. Marathon Oil Corporation (NYSE:MRO) generated a free cash flow of $478 million in the third quarter, reaching $1.3 billion in free cash flows in the first three quarters of 2021. On the other hand, the company’s capital expenditure stood at around $750 million in the past three quarters. The huge gap between free cash flows and capital investments signifies that Marathon Oil Corporation (NYSE:MRO) is in a position to raise its dividends.
Of the 867 hedge funds tracked by Insider money, Marathon Oil Corporation (NYSE:MRO) was in 40 portfolios. D E Shaw and Israel Englander’s Millennium Management were among the leading stakeholders in the company.
9. Devon Energy Corporation (NYSE:DVN)
Fisher Asset Management’s Stake Value: $127 million
Percentage of Fisher Asset Management’s 13F Portfolio: 0.07%
Number of Hedge Fund Holders: 48
Devon Energy Corporation (NYSE:DVN) is one of the best oil stocks to buy and hold amid its strong cash generation along with a low break-even point. Moreover, the company’s cash generation potential permitted it to lift its quarterly dividend by 71% to $0.84 per share. The company currently offers a dividend yield of around 8%. The billion-dollar shares buyback plan is among the factors that hint at a strong outlook and cash position.
Devon Energy Corporation (NYSE:DVN) generated $1.1 billion in free cash flow for the third quarter, representing an 8-fold increase from the fourth quarter of 2020. Its cash balance on the balance sheet grew by $782 million in the third quarter to a total of $2.3 billion. The huge growth in the company’s cash generation has also been appreciated by investors. The share price of Devon Energy Corporation (NYSE:DVN) surged 160% in the last twelve months.
Like Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX), Fisher Asset Management lifted its stake in Devon Energy Corporation (NYSE:DVN) in the past three straight quarters. As of the end of September, the number of long hedge fund positions in Devon Energy Corporation (NYSE:DVN) was at 48. Rajiv Jain’s GQG Partners and Permian Investment Partners were among the leading stakeholders in the company.
8. Hess Corporation (NYSE:HES)
Fisher Asset Management’s Stake Value: $293 million
Percentage of Fisher Asset Management’s 13F Portfolio: 0.18%
Number of Hedge Fund Holders: 27
Hess Corporation (NYSE:HES) is also one of the best oil stocks to buy and hold for the long-term amid its dividends and steady share price upside potential. The company currently offers a dividend yield of around 1% and its share price appreciated more than 35% in the last twelve months.
Hess Corporation (NYSE:HES) generated a net income of $115 million, or $0.37 per share, for the September quarter, compared to a net loss of $243 million, or $0.80 per share, in the same period last year. The oil exploration & production company is working on the strategy of strengthening its reserve base along with lowering its cost of supply and sustaining its cash flow growth.
Hess Corporation (NYSE:HES) was in 27 hedge funds’ portfolios as of September, according to data tracked by Insider Monkey. Adage Capital Management and Alyeska Investment Group were the leading stakeholders in the company.
7. BP p.l.c. (NYSE:BP)
Fisher Asset Management’s Stake Value: $345 million
Percentage of Fisher Asset Management’s 13F Portfolio: 0.21%
Number of Hedge Fund Holders: 29
BP p.l.c. (NYSE:BP) is also billionaire Ken Fisher’s favorite oil stock over the years. It also appears that Fisher Asset Management benefited from its huge stake in BP p.l.c. (NYSE:BP) so far in 2021. The share price of BP p.l.c. (NYSE:BP) increased 27% since the beginning of this year, outperforming the broader market index by a wide margin. Moreover, the company offers a dividend yield of nearly 4.79%.
Prior to 2020, BP p.l.c. (NYSE:BP) consistently increased its dividends in the past 22 years. The company slashed its dividend by half in 2020. However, after stabilization in oil prices, BP p.l.c. (NYSE:BP) once again lifted its quarterly dividend in 2021. On the other hand, its peers like Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) maintained their dividends even when oil prices turned negative in 2020 and remained under pressure throughout the year.
According to data tracked by Insider Monkey, BP p.l.c. (NYSE:BP) was in 29 hedge funds’ portfolios as of September. Like Fisher Asset Management, other popular hedge funds such as Citadel Investment Group and Two Sigma Advisors were among the leading stakeholders.
6. ConocoPhillips (NYSE:COP)
Fisher Asset Management’s Stake Value: $403 million
Percentage of Fisher Asset Management’s 13F Portfolio: 0.25%
Number of Hedge Fund Holders: 49
ConocoPhillips (NYSE:COP) is among the most loved oil stocks. It is the largest US-based exploration and production giant. Fisher Asset Management also appears bullish over the fundamentals of ConocoPhillips (NYSE:COP). The company’s low break-even point along with strong cash generation potential makes it the best oil stock to own.
ConocoPhillips (NYSE:COP) generated $4.1 billion in cash flow from operations during the third quarter, exceeding capital investments of $1.3 billion. ConocoPhillips (NYSE:COP) returned $4.0 billion to shareholders so far in 2021, comprising $1.8 billion in dividends and $2.2 billion in share repurchases.
Hedge funds are also bullish about ConocoPhillips (NYSE:COP). As of the end of the September quarter, ConocoPhillips (NYSE:COP) was in 49 hedge funds’ portfolios. Like Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX), ConocoPhillips (NYSE:COP) is one of the best oil stocks to own according to billionaire Ken Fisher.
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