01. Permian Resources Corporation (NYSE:PR)
Number of Hedge Fund Holders: 51
Forward P/E Ratio as of September 29: 10.84
Permian Resources Corporation (NYSE:PR) is an independent oil and natural gas company headquartered in Midland, Texas. It primarily focuses on the development of crude oil and liquids-rich natural gas reserves in the Delaware Basin, a sub-basin of the Permian Basin, which spans West Texas and New Mexico. With a forward P/E ratio of 10.84, the stock is a compelling choice for investors seeking cheap energy stocks with robust fundamentals. Its strategic acquisition efforts and operational efficiency make Permian Resources Corporation (NYSE:PR) a strong candidate for inclusion in a portfolio focused on undervalued energy stocks.
In its second-quarter earnings report for 2024, Permian Resources Corporation (NYSE:PR) demonstrated outstanding performance, highlighted by an increase in oil production to 153,000 barrels per day and total production of 339,000 barrels of oil equivalent per day. This outperformance led the company to raise its full-year production guidance for the second consecutive quarter, reflecting its operational strength and cost-efficiency measures. The company’s drilling and completion (D&C) efficiencies resulted in a 13% reduction in costs compared to 2023, enabling it to increase its 2024 Turn-in-Line (TIL) guidance by approximately 15 wells without adjusting its capital expenditure ranges.
Additionally, Permian Resources Corporation (NYSE:PR) recent acquisition of the Barilla Draw assets from OXY for $817 million is expected to add significant value, given its 3.4x EBITDA multiple and 17% free cash flow yield. This acquisition fits well within the company’s existing footprint and is expected to drive future growth with over 200 high-return drilling locations that compete for capital.
The company’s strong cash flow generation is evident in its Q2 adjusted operating cash flow of $849 million, or $1.10 per share, and adjusted free cash flow of $332 million, or $0.43 per share. Furthermore, Permian Resources Corporation (NYSE:PR) returned $0.25 per share to shareholders in Q2 through dividends and share buybacks, underscoring its commitment to delivering shareholder value. The company’s growing institutional interest is reflected in the increase in hedge fund holders from 41 in the previous quarter to 51 in Q2 2024, highlighting confidence in its growth potential.
With its solid financial performance, low-cost leadership, and strategic acquisitions, Permian Resources Corporation (NYSE:PR) stands out as one of the best cheap energy stocks under $20 to buy now.
While we acknowledge the potential of PR to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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