In this article, we discuss the 5 oil and gas stocks to buy according to Phill Gross’s Adage Capital. You can read our detailed analysis of Gross’s hedge fund and recent developments, and go directly to read 10 Oil and Gas Stocks to Buy According to Phill Gross’s Adage Capital.
5. EOG Resources, Inc. (NYSE:EOG)
Number of Hedge Fund Holders: 47
EOG Resources, Inc. (NYSE:EOG), a Texas-based crude oil and natural gas producer, is among the oil and gas stocks in Adage Capital’s portfolio in Q3 2021. In Q3, Adage Capital Management increased its stake in the company by 108% and now holds shares worth over $47.3 million.
As per Insider Monkey’s data for the third quarter, 47 hedge funds were bullish on EOG Resources, Inc. (NYSE:EOG), up from 35 in Q2 2021. The stakes hold a consolidated value of roughly $1.02 billion.
Here is what Madison Funds has to say about EOG Resources, Inc. in its Q3 2021 investor letter:
“EOG is a leading oil and gas exploration and production company with attractive exposure to U.S. shale resources. Its energy mix is ~72% oil and liquid natural gas and 28% natural gas. The company has premium acreage that includes over 10,000 potential drilling locations, which provides a long runway for growth. EOG has a disciplined management team that limits operating expenses and capital spending, which results in high free cash flow, a rarity in the Energy sector….”
4. Pioneer Natural Resources Company (NYSE:PXD)
Number of Hedge Fund Holders: 48
Pioneer Natural Resources Company (NYSE:PXD) is an independent oil and gas company with operations in the Permian Basin. The Texas-based oil company recently received $3.1 billion in proceeds from the sale of Delaware Basin assets to Continental Resources, Inc. (NYSE:CLR).
Phillip Gross increased his stake in Pioneer Natural Resources Company (NYSE:PXD) by 24% in Q3 2021, bringing his total holdings to 1.57 million shares worth $262 million.
At the end of the September quarter, 48 hedge funds tracked by Insider Monkey reported owning stakes in Pioneer Natural Resources Company (NYSE:PXD), up from 45 in the previous quarter.
3. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Holders: 49
ConocoPhillips’s (NYSE:COP) price target was recently upped by Mizuho analysts to $101 from $99 while maintaining a Buy rating on the shares.
Adage Capital Management holds 5.7 million shares of ConocoPhillips (NYSE:COP) in Q3, worth roughly $388 million.
Ken Fisher’s Fisher Asset Management was one of the company’s largest shareholders in Q3, owning a stake worth $403 million.
2. Cheniere Energy, Inc. (NYSE:LNG)
Number of Hedge Fund Holders: 49
Cheniere Energy, Inc. (NYSE:LNG) boasts itself as the largest liquefied natural gas (LNG) producer in the US and the second-largest in the world. The Texas-based gas company transports LNG products nationwide and internationally. Cheniere Energy, Inc. (NYSE:LNG) operates three major pipelines and two terminals in the US.
Cheniere Energy, Inc. (NYSE:LNG) was named Cowen analyst Jason Gabelman’s best idea for 2022. The analyst raised his price target to $130 from $120 while maintaining an Outperform rating on the stock.
Here is what Horizon Kinetics has to say about Cheniere Energy, Inc. (NYSE:LNG) in its Q3 2021 investor letter:
“Cheniere Energy, from this list, shows our time frame approach in action. The share price is up very substantially from when we initially bought it 2 ½ years ago, and it reaches new all-time highs almost monthly. The stock dropped by 50% early last year, and the entire return occurred this year. You might think, ‘Ok, 3 years, excellent performance, that’s it.’ That’s not why we bought it. We bought a certain business model, a value development pattern on a massive dormant asset, and a valuation discount.
We bought Cheniere because it was exceedingly cheap as it transitioned from a development stage operating company stage, having just turned profitable a year after completing its basic plant construction and selling its first shipload of liquified natural gas (LNG): 2017 loss of $(390) million vs. 2018 earnings of $470 million…” (Click here to see the full text)
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 64
Adage Capital Management increased its stake in Exxon Mobil Corporation (NYSE:XOM) by 34% in Q3 2021. The company accounted for 1% of Phill Gross’s portfolio.
Exxon Mobil Corporation (NYSE:XOM) is one of the top options for income investors because it is one of the stable and reliable dividend aristocrats in history. In the last 39 years, the Texas-based company has increased its annual payouts, and it now pays its shareholders an annual dividend of $3.52 per share.
Overall, 64 funds of the 867 elite funds tracked by Insider Monkey reported owning stakes Exxon Mobil Corporation (NYSE:XOM) at the end of September 2021. Florida-based investment firm GQG Partners is the largest shareholder of the company with a total stake of $1.56 billion.
Here is what Goehring & Rozencwajg Associates has to say about Exxon Mobil Corporation in its Q3 2021 investor letter:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron expect?
It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publically expressed concerns about both projects.
According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since the production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
You can also take a peek at Billionaire Philippe Laffont is Selling These 10 Stocks and 10 Dividend Stock Picks of Ira Unschuld’s Brant Point Investment.
