5 Best Undervalued Energy Stocks to Buy

1. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 75

PE Ratio as of December 2: 8.95

Exxon Mobil Corporation (NYSE:XOM) is placed high on our list of the best undervalued energy stocks to buy now. Exxon Mobil Corporation (NYSE:XOM) is a profitable company with a healthy balance sheet and strong free cash flow. According to the company’s balance sheet, Exxon Mobil Corporation (NYSE:XOM) has free cash flows of $59.58 billion and a trailing twelve-month operating margin of 16.07%. The stock has soared 72.90% year to date, as of December 2, and is trading at a PE multiple of 8x.

Wall Street analysts see material upside to Exxon Mobil Corporation (NYSE:XOM). On November 11, Piper Sandler analyst Ryan Todd raised his price target on Exxon Mobil Corporation (NYSE:XOM) to $131 from $113 and maintained an Overweight rating on the shares. On November 22, Citi analyst Alastair Syme raised his price target on Exxon Mobil Corporation (NYSE:XOM) to $110 from $98 and reiterated a Neutral rating on the shares.

At the end of the third quarter of 2022, Exxon Mobil Corporation (NYSE:XOM) was spotted on 75 investors’ portfolios that held positions worth $5.53 billion in the company. Of those, GQG Partners was the top investor in the company and disclosed a position worth $2.95 billion.

Here is what First Eagle Investments had to say about Exxon Mobil Corporation (NYSE:XOM) in its second-quarter 2022 investor letter:

“Integrated oil and gas giant Exxon Mobil performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industrywide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”

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