5 Most Undervalued Natural Gas Stocks To Buy According To Hedge Funds

1. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 75

P/E Ratio as of January 20: 9.10

Exxon Mobil Corporation (NYSE:XOM) is one of the most undervalued natural gas stocks to invest in according to hedge funds. On January 17, Exxon Mobil Corporation (NYSE:XOM) confirmed that it is preparing to authorize its fifth oil production project in Guyana and may acquire additional exploration acreage. The development will cost approximately $12.7 billion, with first oil projected to flow by 2027 and continue for 20 years.

On January 17, Scotiabank analyst Paul Cheng upgraded Exxon Mobil Corporation (NYSE:XOM) to Outperform from Sector Perform and raised the price target to $135 from $120. The analyst believes that Exxon will see improved cash flow generation from refining, which would benefit the company as it has the most refining exposure among the oil and gas supermajors. He also notes that Exxon Mobil Corporation (NYSE:XOM) is less affected by market volatility compared to other companies in the sector, making it a good choice during a risk-off trade.

According to Insider Monkey’s third quarter database, 75 hedge funds were long Exxon Mobil Corporation (NYSE:XOM), compared to 72 funds in the prior quarter. Rajiv Jain’s GQG Partners is the biggest stakeholder of the company, with 33.8 million shares worth approximately $3 billion. 

In its Q2 2022 investor letter, First Eagle Investments, an asset management firm, highlighted a few stocks and Exxon Mobil Corporation (NYSE:XOM) was one of them. Here is what the fund said:

“Integrated oil and gas giant Exxon Mobil Corporation (NYSE:XOM) 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 industry wide 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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