1. Canadian Natural Resources (NYSE:CNQ)
Number of Hedge Fund Investors: 46
Forward P/E Ratio as of September 25: 12.77
Canadian Natural Resources (NYSE:CNQ) is one of Canada’s largest independent oil and gas producers. The company explores, develops, and produces crude oil and natural gas in Western Canada, the United Kingdom, the North Sea, offshore Africa, and other international locations.
Canadian Natural Resources (NYSE:CNQ) total production has been steady at around 1.3 million barrels per day for the past few years. Management is waiting for more favorable market conditions as natural gas prices improve. Canadian Natural Resources (NYSE:CNQ) is expected to increase production, which will drive up revenue and gross profit. The company’s unit economics, as measured by netback analysis, have already shown a steady recovery, increasing from $20.64/bbl to $28.68/bbl in Q2 compared to the same quarter in the previous year. This trend is expected to continue, with netbacks potentially reaching $30-35/bbl levels, driven by operational improvements and higher natural gas prices.
The US Energy Information Administration’s (EIA) short-term energy outlook forecast suggests that natural gas prices are expected to increase over the next year, driven by increased liquefied natural gas (LNG) exports. This positive trend is expected to benefit Canadian Natural Resources (NYSE:CNQ), which has intentionally held back on natural gas production, with approximately 20% of its remaining 2024 planned natural gas wells drilled but production curtailed, Canadian Natural Resources (NYSE:CNQ) is well-positioned to capitalize on the expected price increase.
Canadian Natural Resources’ (NYSE:CNQ) stock is trading at a forward PE of 12.77. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $40.64, which represents a 16% upside potential from its current levels. As of the second quarter, the company’s stock is held by 46 hedge funds with a stakes worth $3.77 billion. Fisher Asset Management is the largest shareholder in the company and owns stocks worth $1.49 billion as of June 30.
While we acknowledge the potential of Canadian Natural Resources (NYSE:CNQ) to grow, our conviction lies in the belief that 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 CNQ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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