In this article, we discuss 5 best-performing energy stocks of 2022. If you want to see more stocks in this selection, click 10 Best-Performing Energy Stocks of 2022.
5. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 57
YTD Share Price Gain as of September 15: 73.30%
Devon Energy Corporation (NYSE:DVN) is an Oklahoma-based independent energy company that explores for and distributes oil, natural gas, and natural gas liquids in the United States. On September 5, Devon Energy Corporation (NYSE:DVN) announced that it has entered into a LNG export partnership with Delfin Midstream. The agreement provides Devon Energy Corporation (NYSE:DVN) up to 2 million tons per annum of total liquefaction capacity on a long-term basis. The agreement also opens up room for future equity investments in Delfin by Devon Energy Corporation (NYSE:DVN). Year to date, Devon Energy Corporation (NYSE:DVN) stock has gained about 73% as of September 15.
JPMorgan analyst Arun Jayaram on September 15 downgraded Devon Energy Corporation (NYSE:DVN) to Neutral from Overweight with a price target of $83. The analyst said the downgrade is “essentially a valuation call” as Devon Energy Corporation (NYSE:DVN) has been making “all of the right moves in terms of capital allocation and execution in the field”.
Among the hedge funds tracked by Insider Monkey, 57 funds were bullish on Devon Energy Corporation (NYSE:DVN) at the end of Q2 2022, compared to 66 funds in the previous quarter. Rajiv Jain’s GQG Partners is the biggest stakeholder of the company, with roughly 15 million shares worth $822 million.
GoodHaven Capital Management released its second-quarter 2022 investor letter and mentioned Devon Energy Corporation (NYSE:DVN). Here is what it 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 a 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 mostly 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.”
