5 Best Commodity Stocks To Buy Now

1. Devon Energy Corporation (NYSE:DVN)

Number of Hedge Fund Holders: 51    

Devon Energy Corporation (NYSE:DVN) is an independent energy company that primarily engages in the exploration, development, and production of oil, natural gas, and natural gas liquids. On September 5, Devon Energy declared that it has entered into a liquefied natural gas export partnership with LNG export infrastructure development company, Delfin Midstream. The partnership includes an executed Heads of Agreement for long-term liquefaction capacity.

On November 22, Citi analyst Scott Gruber maintained a Buy rating on Devon Energy Corporation (NYSE: DVN) stock and lowered the price target to $78 from $80, noting that the company posted encouraging third-quarter results.

At the end of the third quarter of 2022, 51 hedge funds in the database of Insider Monkey held stakes worth $1.5 billion in Devon Energy Corporation (NYSE:DVN), compared to 57 in the previous quarter worth $1.5 billion.

In its Q2 2022 investor letter, GoodHeaven Capital Management, an asset management firm, highlighted a few stocks and Devon Energy Corporation (NYSE:DVN) was one of them. Here is what the fund said:

“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long-time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high-return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is most variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”

You can also take a peek at 10 Best Stocks in Each Sector and 10 Best Regional Bank Stocks To Invest In.