In this article, we talk about the 5 oil and gas stocks to buy according to billionaire Steve Cohen. If you wish to read our detailed analysis of the energy sector and Cohen’s hedge fund history, go directly to 10 Oil and Gas Stocks to Buy According to Billionaire Steve Cohen.
5. Phillips 66 (NYSE:PSX)
Point72 Asset Management’s Stake Value: $110.03 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.43%
Number of Hedge Fund Holders: 41
Phillips 66 (NYSE:PSX) is up next on the list of oil and gas stocks to buy according to billionaire Steve Cohen, who increased his stake in the company by 10% in the first quarter to consist of 1.27 million shares valued at $110 million. The Texas-based company provides midstream energy services related to the refining, transportation, storage and marketing of crude oil and various petroleum products, and also deals in the production of specialty chemicals.
On June 14, Wells Fargo analyst Michael Blum raised the firm’s price target on Phillips 66 (NYSE:PSX) to $127 from $114 and reiterated an ‘Overweight’ rating on the company shares. The analyst noted favorable indicators for the company heading into the second half of 2022, and cited an impressive second-quarter for his price target upgrade.
Phillips 66 (NYSE:PSX) is also currently undervalued with a P/E (price to earnings) ratio of 13.66. The company declared a $0.97 per share quarterly dividend on May 20, with an impressive yield of 4.94% as of July 6.
41 hedge funds out of 900+ tracked by Insider Monkey reported bullish bets on Phillips 66 (NYSE:PSX) at the end of Q1 2022, with a collective price tag of $1.38 billion. The company’s largest Q1 shareholder was Israel Englander’s Millennium Management, with a position worth more than $256 million.
4. BP plc (NYSE:BP)
Point72 Asset Management’s Stake Value: $111.73 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.44%
Number of Hedge Fund Holders: 27
BP plc (NYSE:BP) is one of the world’s largest players in the oil and gas industry, with operations in dozens of countries that range from exploration, extraction, refining, distribution, and marketing of natural gas and oil products. The company has a $0.33 per share dividend, with a yield of 4.95% as of July 6.
Deutsche Bank analyst James Hubbard on July 6 maintained a ‘Buy’ rating on BP plc (NYSE:BP) shares, and bumped the price target to 472 GBp from 450 GBp.
27 hedge funds were stakeholders in BP plc (NYSE:BP), according to the Q1 database of Insider Monkey. The combined value of these stakes stood at $1.86 billion. This shows a positive trend from the previous quarter where 26 hedge funds held $1.22 billion worth of positions in the British company.
Hedge funds were seen significantly increasing their stakes in BP plc (NYSE:BP) during the first quarter. Its largest shareholder was Arrowstreet Capital, with a nearly $752 million stake which represented a 121% increase from the previous quarter. Fisher Asset Management and D E Shaw also held noteworthy stakes in BP plc (NYSE:BP) in the first quarter of 2022.
3. Pioneer Natural Resources Company (NYSE:PXD)
Point72 Asset Management’s Stake Value: $119.73 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.47%
Number of Hedge Fund Holders: 54
Billionaire Steve Cohen increased his stake in Pioneer Natural Resources Company (NYSE:PXD) by 70% in the first quarter of 2022, owning roughly 479,000 shares worth $119.7 million. Headquartered in Texas, the company is a major producer of oil in the United States, operating primarily in the Cline Shale of the Permian Basin in West Texas.
Out of all the hedge funds tracked by Insider Monkey at the end of March, 54 reported long bets on Pioneer Natural Resources Company (NYSE:PXD) shares, showing vastly improving investor sentiment over the previous quarter where 43 hedge funds were bullish on PXD shares. With a nearly $150 million stake, Abrams Bison Investments was the leading Q1 shareholder of Pioneer Natural Resources Company (NYSE:PXD).
Upward trends in the energy markets have allowed Pioneer Natural Resources Company (NYSE:PXD) to post great returns. The stock has climbed 28.93% in the last 12 months, and offers an impressive 8.14% dividend yield as of July 6.
On June 14, Pioneer Natural Resources Company (NYSE:PXD) was given an unchanged ‘Overweight’ rating by Barclays analyst Jeanine Wai, who raised the price target to $339 from $302. This was part of the analyst’s bullish outlook on oil and exploration stocks after Barclays updated its oil price forecast, anticipating hikes of $11 and $23 in 2022 and 2023, respectively. The analyst sees “healthy upside and compelling yield despite secular headwinds.”
Here is what Carillon Tower Advisers had to say about Pioneer Natural Resources Company (NYSE:PXD) in its Q1 2022 investor letter:
“Pioneer Natural Resources (NYSE:PXD) performed well in a strong energy sector. Pioneer stood out recently with a pledge to return a large majority of free cash flow to shareowners through dividends and stock buybacks, and ended hedging to give shareowners more earnings and dividend potential should oil and gas prices continue to rise.”
2. Cenovus Energy Inc. (NYSE:CVE)
Point72 Asset Management’s Stake Value: $154.52 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.61%
Number of Hedge Fund Holders: 44
A Canadian hydrocarbon exploration company with sizeable oil and natural gas properties across the United States and Canada, investors took a liking to Cenovus Energy Inc. (NYSE:CVE) in the first quarter. 44 hedge funds held the company shares at the end of March, as compared to 37 hedge funds at the end of December.
On June 16, National Bank analyst maintained an ‘Outperform’ rating on Cenovus Energy Inc. (NYSE:CVE) shares and increased the price target to C$41 from C$35. CVE shares have registered gains of 83.94% in the last 12 months, and 36.94% so far in 2022 as of July 6.
Cenovus Energy Inc. (NYSE:CVE) recently announced the purchase of a 50% interest in the Sunrise oil sands project from British firm BP plc (NYSE:BP), for C$600 million in cash and a conditional payment of C$600 million which expires after two years. Cenovus has now become 100% stakeholder of the project located in Alberta, Canada, thereby boosting its oil sands portfolio.
As of the end of the first quarter of 2022, the top shareholder of Cenovus Energy Inc. (NYSE:CVE) was Soroban Capital Partners, with a stake worth $808 million which represented a massive 346% increase from the previous quarter. Point72 Asset Management’s $154.5 million stake in Cenovus Energy Inc. (NYSE:CVE) also showed a huge jump of 496% from the previous quarter, and consisted of 9.26 million shares.
Investment firm L1 Capital talked about many stocks in its Q4 2021 investor letter, and Cenovus Energy Inc. (NYSE:CVE) was one of them. Here is what they said:
“Detailed, bottom-up stock research remains the investment team’s primary focus and the core driver of portfolio performance. 2021 once again demonstrated the team’s ability to identify ‘winners’ through extensive company and industry research across a diverse range of sectors. Key contributors included Cenovus Energy, (due to) recovering oil price leading to improved investor sentiment, consensus earnings upgrades and strong free cashflow generation.”
1. ConocoPhillips (NYSE:COP)
Point72 Asset Management’s Stake Value: $198.11 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.78%
Number of Hedge Fund Holders: 67
ConocoPhillips (NYSE:COP) is the largest energy stock in Steve Cohen’s Q1 portfolio. The billionaire increased his exposure to the firm by 231% during the first quarter.
With significant operations related to the production, transportation and marketing of crude oil, natural gas, and LNG around the world, ConocoPhillips (NYSE:COP) is a dominant name in the energy sector. As of July 6, it has risen 37.24% in the last 12 months, and 11.93% in the year to date. With a 8.56 P/E (price to earnings) ratio, COP is also a significantly undervalued stock.
67 hedge funds reported ownership of positions in ConocoPhillips (NYSE:COP) at the close of the first quarter. This shows growing investor confidence in the company over the previous quarter, where 56 hedge funds were long COP shares. Diamond Hill Capital was the firm’s largest Q1 shareholder, with a new $703 million position. Fisher Asset Management was also a significant stakeholder of ConocoPhillips (NYSE:COP) with a stake worth roughly $651 million.
On May 31, Mizuho analyst Vincent Lovaglio raised the firm’s price target on ConocoPhillips (NYSE:COP) to $157 from $150 and reiterated a ‘Buy’ rating on the shares. Soaring global energy commodity prices have driven significant gains for energy exploration and production companies in the United States, and the analyst expects this to remain the case moving forward.
In its Q1 2022 investor letter, ClearBridge Investments discussed the performance of ConocoPhillips (NYSE:COP), stating:
“The energy sector, which led a strong market in 2021, generated even more dramatic relative performance in the quarter, advancing 39% and leading the benchmark Russell 1000 Value Index. Years of restrained investment in the energy sector, combined with a strong post-pandemic recovery, contributed to the higher commodity prices. The upward pressure escalated with the Russian invasion of Ukraine. Our energy holdings ConocoPhillips (NYSE:COP) benefited from higher commodity prices and was among the top contributors to first-quarter performance.”
You can also take a look at 10 Most Anticipated IPOs of 2022 and 10 Best Dividend Stocks for Passive Income.
