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10 Oil Stocks To Buy That Are Too Cheap To Ignore

In this piece, we will take a look at the ten oil stocks that are too cheap to ignore. To jump straight to the top five stocks in this list, head on over to 5 Oil Stocks That Are Too Cheap To Ignore.

At a time when the global economy is under severe strain due to the Russian invasion of Ukraine and interest rate hikes by the Federal Reserve, OPEC+, led by Saudi Arabia, injected fresh life into crude oil prices when it announced a large production cut to ensure that prices remained above $90/barrel. This made oil prices jump again, and cemented the need for non-OPEC oil suppliers.

In this backdrop, and despite the ongoing push towards renewable energy, the oil industry will continue to perform strongly. This assumption is backed by a host of market research reports, which analyze the oil industry as a whole and break it down into bite sized chunks for a deeper analysis. For instance, a report from The Business Research Company, which takes a look at the global crude oil market, estimates that this market was worth $1.35 trillion in 2021, and it will grow at a compounded annual growth rate of 4.2% this year to sit at $1.41 million by year end. This in itself marks $60 billion growth, and if this wasn’t enough, the research firm goes on to add that from 2022 to 2026, the industry will grow at 1% to be worth $1.47 trillion.

Another report, this time from Global Market Insights, wagers that the oil and gas infrastructure market was worth $620 billion in 2021, and it will grow at 6% from 2022 to 2030 to be worth $1.15 trillion – almost equaling the crude oil market’s current value. Driving the growth will be non-conventional exploration methods such as shale exploration and tight gas, with some aid from technological innovations aiding more efficient production and government policies favoring more exploration. These assumptions are bolstered by recent trends that have spurred the growth in liquefied natural gas (LNG) production and exploration, with this fuel providing the double advantages of being environmentally friendly and easily available.

Finally, 360 Research Reports also takes a look at the oil and gas pipeline market. Its research suggests that this sector, which consists of a variety of steel pipes and oil and natural gas delivery channels, was worth $40 billion this year, and from now till 2028, it will grow at a CAGR of 8% to be worth $64 billion.

Bill Perkins of Skylar Capital pointed out the under-investment in the oil markets in the wake of the oil output cut and explained that:

I think it’s pretty significant because they’re cutting into a tightening market. There’s under-investment into oil and oil drilling. It’s one of the points they’ve been making is the price signal of the markets isn’t really enough to induce the investment or the supply response that we need. So that’s an interesting argument that OPEC is coming out and saying hey, prices are too low for investment. It’s one of the things they’re saying.

Against this backdrop, we’ve made a list of cheap oil stocks for you today, with some top firms being Exxon Mobil Corporation (NYSE:XOM), Occidental Petroleum Corporation (NYSE:OXY), and Marathon Oil Corporation (NYSE:MRO).

Photo by Jeff W on Unsplash

Our Methodology

We took a broad look at the oil industry to take stock of the countless firms operating in it and then selected them based on their share price, fundamentals, and market dynamics. They were then ranked according to Insider Monkey’s Q2 2022 survey of 895 hedge funds. These are are cheap when compared to their intrinsic value and are receiving positive ratings from the Wall Street.

10. Nordic American Tankers Limited (NYSE:NAT)

Share Price as of October 15, 2022: $3.05

Number of Hedge Fund Holders: 7

Nordic American Tankers Limited (NYSE:NAT) is a crude oil tanker company that is headquartered in Hamilton, Bermuda. The firm has a fleet of more than twenty tankers and it transports oil all over the globe.

Nordic American Tankers Limited (NYSE:NAT) is slated to benefit from the increasing tanker rates that have picked up the pace after falling earlier this year. The firm operates Suezmax tankers, and rates for these are averaging at $40,000 per day, which is the highest that they have been for the third quarter over the past two years. Nordic American Tankers Limited (NYSE:NAT) also pays a 2 cent dividend for a 2.62% yield, and its shares have rallied by 57% year to date.

This will bode Nordic American Tankers Limited (NYSE:NAT) well, as the firm’s second quarter results revealed that at a time when tanker rates were $20,000, the firm had beaten both analyst revenue and EPS estimates. Seven out of the 895 hedge funds polled by Insider Monkey during this year’s second quarter had bought the company’s shares.

Out of these, Israel Englander’s Millennium Management is Nordic American Tankers Limited (NYSE:NAT)’s largest investor. It owns 2.7 million shares that are worth $5.8 million.

Nordic American Tankers Limited (NYSE:NAT) joins Occidental Petroleum Corporation (NYSE:OXY), Exxon Mobil Corporation (NYSE:XOM), and Marathon Oil Corporation (NYSE:MRO) in our list of cheap oil stocks.

9. Ardmore Shipping Corporation (NYSE:ASC)

Share Price as of October 15, 2022: $10.60

Number of Hedge Fund Holders: 13

Ardmore Shipping Corporation (NYSE:ASC) is another Bermuda based firm that operates tankers. These enable the firm to ship oil and chemicals all over the globe through its double hulled vehicles.

Ardmore Shipping Corporation (NYSE:ASC) has performed well on the stock market this year, as its shares have appreciated by a whopping 190% year to date, managing to deliver outsized returns even as major stock market indexes tumble. Data from S&P Global Market Intelligence suggests that Ardmore Shipping Corporation (NYSE:ASC) is on track to post record net sales of $175 million this year, alongside another record $47 million in operating income.

Additionally, the firm’s net income and EPS are strongly related to rising tanker rates, with a $1,000 increase in daily rates slated to grow its EPS by $0.28 cents. As this year’s second quarter ended, 13 out of the 895 hedge funds polled by Insider Monkey had owned a stake in Ardmore Shipping Corporation (NYSE:ASC).

Ardmore Shipping Corporation (NYSE:ASC)’s largest investor is Chuck Royce’s Royce & Associates which owns 1.3 million shares that are worth $9.4 million.

8. Magnolia Oil & Gas Corporation (NYSE:MGY)

Share Price as of October 15, 2022: $21.45

Number of Hedge Fund Holders: 22

Magnolia Oil & Gas Corporation (NYSE:MGY) is an American oil and gas company that explores, develops, and produces oil and natural gas. The firm has 4.7 million acres worth of leases and more than one thousand wells all over the country. It is headquartered in Houston, Texas.

Magnolia Oil & Gas Corporation (NYSE:MGY) is slated to generate $822 million in revenue this year, on the basis of an $87 per barrel price of WTI oil. The firm also expects to grow its oil production by 13% this year to churn out 76,000 barrels per day. It also has $100 million in net cash and is slated to generate close to a billion dollars of positive cash flow over the next 18 months.

Magnolia Oil & Gas Corporation (NYSE:MGY)’s shares have appreciated by 11% year to date and the firm pays a 5 cent dividend for a 0.91% yield. Insider Monkey’s June quarter of 2022 survey outlined that 22 out of 895 hedge funds had invested in the company. KeyBanc set a $28 share price target for Magnolia Oil & Gas Corporation (NYSE:MGY) in September 2022, stating that its management is best in class.

Magnolia Oil & Gas Corporation (NYSE:MGY)’s largest investor is Amy Minella’s Cardinal Capital which owns 3.8 million shares that are worth $80 million.

7. Kosmos Energy Ltd. (NYSE:KOS)

Share Price as of October 15, 2022: $5.93

Number of Hedge Fund Holders: 25

Kosmos Energy Ltd. (NYSE:KOS) is a deep water oil and gas exploration firm that engages in exploration in offshore Ghana, the Gulf of Mexico, and other areas. The firm is headquartered in Dallas, Texas, the United States.

Kosmos Energy Ltd. (NYSE:KOS) reported $132 million in net income during its second fiscal quarter, which reversed the net loss the firm had made in the same quarter last year. At the same time, its total revenue of $621 million marked a strong 62% annual growth, with the firm churning out 62,200 barrels of oil equivalent per day (boepd).

Kosmos Energy Ltd. (NYSE:KOS)’s shares have outperformed the market this year, and their year to date growth sits at 49%. Insider Monkey’s Q2 2022 survey of 895 hedge funds outlined that 25 had invested in the company.

Kosmos Energy Ltd. (NYSE:KOS)’s largest investor in our database is D.E. Shaw’s D E Shaw which owns 10 million shares that are worth $65 million.

 6. Enerplus Corporation (NYSE:ERF)

Share Price as of October 15, 2022: $15.50

Number of Hedge Fund Holders: 25

Enerplus Corporation (NYSE:ERF) is a crude oil and natural gas developer that operates in the United States and in Canada. The firm has millions of barrels of proven oil reserves and it is headquartered in Calgary, Canada.

Enerplus Corporation (NYSE:ERF) is riding the current strong wave of demand for oil from North American firms. Based on this, the firm is expected to generate $511 million in pre-dividend cash flow by the end of this year’s second half. Assuming a $90 WTI barrel price, Enerplus Corporation (NYSE:ERF)’s expected H2 2022 revenue comes out at $1.2 billion.

Enerplus Corporation (NYSE:ERF)’s share price has grown by 37% year to date, and it also touched its $18.58 52-week high in June 2022. The firm pays a 5 cent dividend for a 1.55% yield, and by the end of this year’s second quarter, 25 out of the 895 hedge funds polled by Insider Monkey had invested in the firm.

Out of these, Phill Gross and Robert Atchinson’s Adage Capital Management is Enerplus Corporation (NYSE:ERF)’s largest investor. It owns 7.8 million shares that are worth $103 million.

Along with Exxon Mobil Corporation (NYSE:XOM), Occidental Petroleum Corporation (NYSE:OXY), and Marathon Oil Corporation (NYSE:MRO), Enerplus Corporation (NYSE:ERF) is a hot cheap oil stock.

Click to continue reading and see 5 Oil Stocks To Buy That Are Too Cheap To Ignore.

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Disclosure: None. 10 Oil Stocks To Buy That Are Too Cheap To Ignore is originally published on Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

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Elon Musk was even more blunt:

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The “Toll Booth” Operator of the AI Energy Boom

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The Hedge Fund Secret That’s Starting to Leak Out

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

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But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

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And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…