In this article, we will take a look at the 5 high growth energy stocks to buy. To read our analysis of the recent technology trends, and market activity, you can go to the 12 High Growth Energy Stocks to Buy.
5. SeaDrill Limited (NYSE:SDRL)
Latest YoY Quarterly Revenue Growth: 53.90%
Number of Hedge Fund Holders: 38
SeaDrill Limited (NYSE:SDRL) is a leading offshore drilling contractor utilizing advanced technology to unlock oil and gas resources for clients across harsh and benign locations around the globe. It conducts operations across all kinds of geographies, from shallow to ultra-deepwater environments.
In April, SeaDrill Limited (NYSE:SDRL) completed the previously announced acquisition of Aquadrill LLC, an offshore drilling company with a fleet comprising of eight drilling units. The all-stock transaction valued the target company at $958 million and was announced in December last year.
On November 27, SeaDrill Limited (NYSE:SDRL) released its quarterly results for Q3 2023. It generated total operating revenues of $414 million and net income of $90 million. It reported a normalized EPS of $1.04 for the quarter, which surpassed the consensus estimates by $0.21.
4. Cactus, Inc. (NYSE:WHD)
Latest YoY Quarterly Revenue Growth: 56.04%
Number of Hedge Fund Holders: 16
Houston, Texas-based Cactus, Inc. (NYSE:WHD) designs, manufactures, sells, and rents a range of highly engineered wellheads and pressure control equipment principally for onshore unconventional oil and gas wells. Its products are utilized during the drilling, completion (including fracturing) and production phases of wells.
On November 8, Cactus, Inc. (NYSE:WHD) released its financial results for Q3 2023. Its revenue increased by 56% y-o-y to $288 million, while net income surged by 64% y-o-y to $68 million. Its EPS of $0.80 missed consensus estimates by $0.07.
Following the earnings release, Barclays analyst David Anderson lowered the price target for Cactus, Inc. (NYSE:WHD) shares to $57 from $60 and maintained an ‘Overweight’ rating. The price target represents a potential upside of 29.46% based on the latest share price.
As of Q3 2023, 16 hedge funds owned Cactus, Inc. (NYSE:WHD) shares worth $149 million. Millennium Management and Citadel Investment Group were the leading hedge fund investors of the company with ownership of nearly 0.8 million shares each.
3. Tidewater Inc. (NYSE:TDW)
Latest YoY Quarterly Revenue Growth: 56.06%
Number of Hedge Fund Holders: 39
Established in 1956, Houston, Texas-based Tidewater Inc. (NYSE:TDW) is the owner and operator of one of the world’s largest Offshore Support Vessel (OSV) fleets. Its fleet comprises of more than 200 vessels including Anchor Handling Towing Supply Vessels, Platform Supply Vessels, offshore tugs, specialty vessels, crew boats, and floating storage vessels.
On November 6, Tidewater Inc. (NYSE:TDW) released its financial results for Q3 2023. Its revenues increased by 56% y-o-y to $299 million, while it generated a net income of $26 million. The normalized EPS was recorded at $0.62 for the quarter, which exceeded consensus estimates by -$0.64.
Earlier in July, Tidewater Inc. (NYSE:TDW) announced the closing of its acquisition of 37 platform supply vessels and related assets from Solstad Offshore ASA for a purchase price of $580 million.
2. Baytex Energy Corp. (NYSE:BTE)
Latest YoY Quarterly Revenue Growth: 59.06%
Number of Hedge Fund Holders: 24
Calgary, Alberta-based Baytex Energy Corp. (NYSE:BTE) is an energy company engaged in the acquisition, development and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States.
On November 28, Baytex Energy Corp. (NYSE:BTE) announced the sale of certain of its Viking assets located at Forgan and Plato in southwest Saskatchewan for C$154 million. The company intends to use the net proceeds from the sale to reduce its bank indebtedness.
Earlier in June, Baytex Energy Corp. (NYSE:BTE) completed the acquisition of Ranger Oil Corporation for a total cash and stock consideration of $2.2 billion. The acquisition adds 162,000 net acres in the crude oil window of Eagle Ford.
Baytex Energy Corp. (NYSE:BTE) is working on an aggressive shareholder return program and intends to allocate 50% of its free cash flow for share buybacks and dividend payments with the remaining 50% to be used for strengthening its balance sheet.
1. Noble Corporation (NYSE:NE)
Latest YoY Quarterly Revenue Growth: 128.02%
Number of Hedge Fund Holders: 48
Sugar Land, Texas-based Noble Corporation (NYSE:NE) is one of the largest offshore drilling contractors in the world. It performs contract drilling services with a fleet of offshore drilling units focused largely on ultra-deepwater and high specification jackup drilling opportunities worldwide.
On October 31, Noble Corporation (NYSE:NE) released its financial results for Q3 2023 which surpassed consensus estimates by a significant margin with a revenue of $697 million and an EPS of $1.09. The top and bottom line figures exceeded estimates by $60 million and $0.25, respectively.
Noble Corporation (NYSE:NE) initiated quarterly dividends in July this year at an annualized rate of $1.20 per share. The Board of Directors of the company raised the dividend amount to $0.40 per share for Q4 2023.
As of Q3 2023, 48 of the 910 hedge funds tracked by Insider Monkey owned Noble Corporation (NYSE:NE) shares worth $1.1 billion. William B. Gray’s Orbis Investment Management was the largest hedge fund shareholder with ownership of 3.5 million shares valued at $178 million.
In its Q3 2023 “Mid Cap Strategy” investor letter, ClearBridge Investments, an investment management firm, made the following comments about Noble Corporation (NYSE:NE):
“We initiated a new position in Noble, a leading offshore drilling contractor for the oil and gas industry. Consolidation and underinvestment has significantly depleted the number of drilling ships available to meet the growing demand for offshore oil drilling, giving the company greater pricing power. Armed with a clean balance sheet and significant cash flow generation as day rates for its fleet rise, we believe the company will be a prime beneficiary of resurgent energy demand and investment in oil and gas drilling.”
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