12 Hot Oil Stocks to Buy According to Hedge Funds

2. Diamondback Energy, Inc. (NASDAQ:FANG)

Gain Over Past 12 Months: 20.3%

Number of Hedge Fund Holders: 49

Diamondback Energy, Inc. (NASDAQ:FANG) is a Texas-based independent oil and natural gas company, focused on the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas.

Diamondback Energy, Inc. (NASDAQ:FANG) further expanded its footprint in the Permian Basin after the completion of its $26 billion merger with Endeavor Energy Resources in September 2024. The strategic move is anticipated to result in a more capital-efficient program this year and the newly combined entity is expected to produce over 816,000 barrels of oil equivalent (BOE) per day.

Diamondback Energy, Inc. (NASDAQ:FANG) had a strong Q3 2024 as it reported a revenue uptick of 13%, driven by higher production volumes following the merger and an increase in oil sales. However, earlier this month, the company flagged a 5% drop in average realized price for its oil production in the fourth quarter, weighed down by a patchy post-pandemic demand recovery, China’s sluggish economy, and excess global supply.

Diamondback Energy, Inc. (NASDAQ:FANG) reported a free cash flow of $708 million in Q3 2024 and declared a quarterly dividend of $0.9 per share. The company has witnessed an industry-leading average quarterly dividend growth of 8% since its introduction in 2018. Moreover, Diamondback has also increased its share repurchase authorization to $6 billion, demonstrating a commitment to returning value to shareholders.

Chartwell Investment Partners, LLC, said the following about Diamondback Energy, Inc. (NASDAQ:FANG) in its Q3 investment letter:

“Diamondback Energy, Inc. (NASDAQ:FANG) is an exploration and production company with operations focused on the Mid-land and Delaware basins, both located within the Permian Basin in West Texas and southeastern New Mexico. While fundamental performance remains solid, shares were pressured by lower oil prices.”