1. Permian Resources Corporation (NYSE:PR)
Gain Over Past 12 Months: 23.36%
Number of Hedge Fund Holders: 56
Topping our list of Hot Oil Stocks To Buy According to Hedge Funds is Permian Resources Corporation (NYSE:PR), an independent oil and natural gas company focused on driving sustainable returns through the responsible acquisition, optimization, and development of high-return oil and natural gas properties.
Permian Resources Corporation (NYSE:PR) further bolstered its presence in the Permian Basin with the acquisition of Barilla Draw assets in Q3 2024, with the deal expected to boost the company’s output by about 24,000 barrels of oil equivalent per day. It would also add about 27,500 net acres to the PR’s footprint in the largest shale oil belt in the world. Additionally, it was recently announced that Permian Resources has agreed to divest its natural gas and oil gathering systems in the Delaware sub-basin of West Texas to Kinetik Holdings for a hefty sum of $180 million, allowing the fossil fuel company to return its focus to its exploration and production work and letting it proceed with development of the Barilla Draw assets.
One of Permian Resources Corporation (NYSE:PR)’s most significant developments has been the reduction in drilling and completion days per well, leading to substantial cost reductions and helping improve the company’s profitability. In Q3 of 2024, PR reduced its drilling and completion costs by 16% YoY, while also achieving a 16% YoY reduction in drilling cycle times and a 19% YoY increase in completion crew pump hours per day.
Permian Resources Corporation (NYSE:PR) is also one of the largest natural gas producers in the Permian Basin, producing approximately 600 million cubic feet per day of residue gas. This puts the company in a great position to cater to the rising LNG exports and also creates the potential for significant upside to free cash flow generation if natural gas prices improve going forward, as is widely expected.
Aristotle Capital Boston, LLC, stated the following about Permian Resources Corporation (NYSE:PR) in its Q3 investment letter:
“Permian Resources Corporation (NYSE:PR) is a Texas-based oil & gas exploration & production company with a large acreage position and deep inventory of high return potential drilling locations in the core of the Permian Basin. We expect management to continue to execute on its strategy of optimizing returns, diligently allocating capital to new opportunities, and returning excess capital to shareholders.”
Overall PR ranks first on our list of the hot oil stocks to buy according to hedge funds. While we acknowledge the potential for PR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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