In this article, we discuss 5 oil stocks that billionaires are buying. If you want to see more stocks in this selection, check out 10 Oil Stocks Billionaires Are Loading Up On.
5. Phillips 66 (NYSE:PSX)
Number of Billionaire Investors: 14
Dollar Value of Billionaire Holdings: $452,249,035
Number of Hedge Fund Holders: 37
Phillips 66 (NYSE:PSX) is a Houston, Texas-based company that operates in various segments of the oil and gas industry. The company was established following a spin-off from ConocoPhillips (NYSE:COP). Phillips 66 (NYSE:PSX) is also one of the best oil stocks attracting billionaires as of Q1 2023.
On May 18, Ryan Todd at Piper Sandler assigned Phillips 66 (NYSE:PSX) stock a target price of $127 along with an Overweight rating. There is a widespread consensus on the positive prospects of Phillips 66 (NYSE:PSX) stock in the refining and marketing (R&M) segment due to the company’s enhanced capital returns and limited downtime during Q1 2023. For Q2 2023, Phillips 66 (NYSE:PSX) has provided the best utilization rate guidance in the range of 91% to 93%.
4. Chevron Corporation (NYSE:CVX)
Number of Billionaire Investors: 15
Dollar Value of Billionaire Holdings: $22,911,447,333
Number of Hedge Fund Holders: 64
Chevron Corporation (NYSE:CVX) is a San Ramon, California-based integrated energy company founded in 1879. The company operates in several countries and has a diverse portfolio of oil and gas assets.
In an update issued to investors on June 1, Biraj Borkhataria at RBC Capital upgraded Chevron Corporation (NYSE:CVX) from a Sector Perform to an Outperform rating and increased the target price from $165 to $180. Analysts believe that the company’s recent acquisition of PDC Energy, Inc. (NASDAQ:PDCE) for $7.6 billion will create long-term value for Chevron Corporation (NYSE:CVX). The company’s strong growth prospects justify its inclusion in our list of the best oil stocks to buy, according to billionaires.
Here’s what Madison Funds said about Chevron Corporation (NYSE:CVX) in its Q4 2022 investor letter:
“This quarter we are highlighting Chevron Corporation (NYSE:CVX) as a relative yield example in the Energy sector. CVX is a leading integrated oil company with exploration, production, and refining operations. It is the second largest oil company in the United States with more than 70% of production volumes from oil and liquid-linked natural gas. We believe it has a sustainable competitive advantage due to its scale and low-cost position. It has a large acreage position in the Permian Basin, which is a high-quality oil field. CVX was an early mover in the Permian and did not overpay to enter the oilfield; 75% of its position has a no or low royalty rate, which gives it a cost advantage over competitors.
Our thesis is that free cash flow growth per share is expected to accelerate due to disciplined capital spending, rising Permian production volumes, and stock repurchases. The company has also made important investments in low-carbon areas like greenhouse gas reduction, carbon capture, hydrogen, and renewable fuels which we believe will pay off later in the decade as the world transitions more to renewable energy sources…” (Click here to read the full text)
3. ConocoPhillips (NYSE:COP)
Number of Billionaire Investors: 16
Dollar Value of Billionaire Holdings: $1,049,768,808
Number of Hedge Fund Holders: 72
ConocoPhillips (NYSE:COP) is a Houston, Texas-based energy company established in 1917 that is one of the largest independent E&P companies in the world.
On May 26, ConocoPhillips (NYSE:COP) announced that it would buy the remaining 50% stake in the Surmont oil facility from a subsidiary of TotalEnergies SE (NYSE:TTE) for a sum of $3 billion. This will enhance the presence of the company in the Canadian oil sands, which are considered to be home to the world’s biggest crude oil reserves. Click here to read the ConocoPhillips (NYSE:COP) earnings call transcript for Q1 2023.
Oakmark Funds shared its stance on ConocoPhillips (NYSE:COP) in its Q1 2023 investor letter. Here’s what the firm said:
“ConocoPhillips (NYSE:COP) is one of the largest and lowest cost U.S. exploration and production companies in the country, led by CEO Ryan Lance—in our view one of the best value creators in the industry. ConocoPhillips’s share prices fell in the first quarter as oil prices receded, which is not atypical. We were buying the company at prices where it could generate its entire market cap in free cash flow over the next decade while growing the production such that at the end of that time, the base of production would be one-third higher. This sort of reinvestment opportunity is unique to ConocoPhillips and clearly not reflected in the current share price.”
ConocoPhillips (NYSE:COP) is considered one of the best oil stocks by hedge funds. At the end of Q1 2023, 72 elite funds held a stake in the company.
2. Marathon Petroleum Corporation (NYSE:MPC)
Number of Billionaire Investors: 16
Dollar Value of Billionaire Holdings: $2,105,846,700
Number of Hedge Fund Holders: 58
Marathon Petroleum Corporation (NYSE:MPC) is a Findlay, Ohio-based petroleum refining, marketing, and transportation company that was established in 2011 when Marathon Oil Corporation (NYSE:MRO) spun off its refining and marketing operations into a separate entity.
Marathon Petroleum Corporation (NYSE:MPC) anticipates an increase in oil demand in the coming quarters that will result in stronger margins for the remainder of 2023. The economic recovery following the COVID-19 lockdowns has resulted in a rise in margins for refiners. The conflict between Russia and Ukraine and an increase in the demand for jet fuel have also contributed to rising margins.
Elliott Management was the leading hedge fund investor in Marathon Petroleum Corporation (NYSE:MPC) during Q1 2023.
1. Occidental Petroleum Corporation (NYSE:OXY)
Number of Billionaire Investors: 19
Dollar Value of Billionaire Holdings: $14,492,441,777
Number of Hedge Fund Holders: 81
Occidental Petroleum Corporation (NYSE:OXY) is a Houston, Texas-based oil and gas E&P company that operates in various regions globally, including the US, Latin America, the Middle East, and North Africa. The company has secured first place on our list of the best oil stocks billionaires are loading up on.
Berkshire Hathaway Inc. (NYSE:BRK-B) holds a stake worth $13.22 billion in Occidental Petroleum Corporation (NYSE:OXY) as of March 31, with around 211.71 million shares. The investment arm of the diversified conglomerate led by Warren Buffett increased its stake in Occidental Petroleum Corporation (NYSE:OXY) by acquiring 4.66 million shares in the company between May 25 and 30. The Oracle of Omaha also holds $10 billion worth of preferred stock of the company and has warrants to buy $5 billion worth of stock at a share price of $59.62. Mr Buffett has indicated that he does not intend to control the company and appreciates the efforts of the current CEO, Vicki Hollub.
Disclosure: None. You can also take a look at the 11 Best AI ETFs to Invest In 2023 and the ChatGPT Stock Portfolio: Top 10 Picks.
