In this article, we are going to discuss the 5 energy stocks that elite hedge funds currently admire. If you want to read our detailed analysis of these stocks, go directly to the Elite Hedge Funds Love These 10 Energy Stocks.
05. Antero Resources Corp (NYSE:AR)
Number of Hedge Fund Holders as of Q2 2022: 64
Hedge funds tracked by Insider Monkey have been bullish on Antero Resources Corp (NYSE:AR) shares since Q1, 2021. The number of hedge funds holding Antero Resources Corp (NYSE:AR) shares increased gradually in the past four quarters touching its peak during the recent quarter with 64 hedge funds holding Antero Resources Corp (NYSE:AR) shares. Zach Schreiber’s Point State Capital is the largest stakeholder holding 4.2 million shares of Antero Resources Corp (NYSE:AR) valued at $130 million.
Antero Resources Corporation (NYSE:AR) is a hydrocarbon exploration firm with all of its reserves located in the Appalachian Basin. Petrol, ethane, natural gas liquids, and natural gas are all present in the company’s reserves. As of August 29, the company shares had increased significantly over the previous 12 months by over 229%.
On July 27, Antero Resources Corporation (NYSE:AR) released its Q2 2022 financial results. The business generated $563 million in non-GAAP net income. The company’s $2.2 billion in revenue was a 349.5% YoY increase, beating Wall Street expectations by $380 million. Additionally, non-GAAP FCF of $664 million and net cash produced by operating activities of $923 million were reported. The business bought back $247 million worth of stock and lowered its overall debt by $383 million.
04. Cheniere Energy, Inc. (NYSE:LNG)
Number of Hedge Fund Holders as of Q2 2022: 65
The number of hedge funds holding Cheniere Energy, Inc. (NYSE:LNG) shares have shown an upward trend over the past four quarters. A total of 65 hedge funds are holding a stake in Cheniere Energy, Inc. (NYSE:LNG) as compared to 62 in the previous quarter. Icahn Capital LP is the largest shareholder holding 5.6 million shares worth roughly $747 million.
Over the last twelve months, Cheniere Energy, Inc. (NYSE:LNG) finances significantly improved year over year. The substantial rise in natural gas prices that we observed was the main factor in this, while the company also experienced an increase in sales volumes. According to its latest quarter’s earnings results announced on August 4, the stock has EPS GAAP Actual of $2.90, missing the estimate by $0.50; however, with a revenue figure of $8.01 billion, it has beaten the estimates by $1.59 billion. As of August 29, the stock has produced a return of 26.23% in the past six months and 63.68% year to date.
On August 16, Cheniere Energy, Inc. (NYSE:LNG) price target was increased to $186 from $160 by Barclays analyst Marc Solecitto, who also maintained an Overweight rating on the stock. Theresa Chen and Solecitto believe that there are still distinct tailwinds in their coverage of the North American midstream and refining industries, and they believe that, barring a significant economic shock, the fundamentals of the U.S. refining industry will continue to perform strongly.
03. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders as of Q2 2022: 66
Warren Buffett’s Berkshire Hathaway is the largest shareholder of Occidental Petroleum Corporation (NYSE:OXY), holding 159 million of its shares worth roughly $9,335 million, comprising 3.11% of its portfolio. Following the Federal Energy Regulatory Commission’s approval of Berkshire Hathaway’s application, which was submitted on July 11, to purchase up to 50% of Occidental Petroleum’s common stock through secondary market transactions, the company’s shares are rising. The stock has gained 13.42% during the past month. According to Berkshire, it presently owns about 18.72% of the outstanding common shares of Occidental and is requesting permission to purchase up to 50% of the company’s stock through secondary market transactions as part of the proposed transaction. The information fueled rumors that Berkshire might be preparing to acquire Occidental. However, Occidental hasn’t been notified of Buffett’s plans to buy majority ownership in the business, according to sources familiar with the situation.
On August 19, Warren Buffett’s Berkshire Hathaway received regulatory approval to purchase up to 50% of Occidental Petroleum.
Hedge funds’ popularity touched its peak during Q1, 2022, with 67 hedge funds holding a stake in Occidental Petroleum Corporation (NYSE:OXY) during the most recent quarter as compared to 66 in the previous quarter.
Smead Capital Management mentioned Occidental Petroleum Corporation (NYSE:OXY) in the Q2, 2022 investor letter. Here’s what the fund said:
“For the quarter, our best-performing stocks were Continental Resources (CLR), Merck (MRK) and Occidental Petroleum Corporation (NYSE:OXY). Despite a steep sell-off in June in the oil and gas stocks, two of our oil stocks made the quarterly list.
If you are wondering how we are outperforming the S&P 500 Index in the first half of the year, look no further than our top three performers. Occidental Petroleum (OXY), Continental Resources (CLR) and Conoco Phillips (COP) soared in value and were barely represented in the S&P 500 Index. To quote Jerry Jones, owner of the Dallas Cowboys, “We are in the first quarter on higher energy prices!”
02. Chesapeake Energy Corporation (NYSE:CHK)
Number of Hedge Fund Holders as of Q2 2022: 67
Chesapeake Energy Corporation (NYSE:CHK) has touched the peak of its popularity among hedge funds tracked by Insider Monkey during Q2 of 2022, with 67 hedge funds holding a stake as compared to 59 in the previous quarter. Oaktree Capital Management is the largest shareholder holding 10.5 million shares, valued at $852 million. On August 3, Chesapeake Energy Corporation (NYSE:CHK) CEO Dell’Osso revealed his plan to exit Eagle Ford shale in pivot to natural gas. The shale driller will focus solely on its gas-rich holdings in Marcellus and Haynesville basins. Following the news, the stock has gained 12.05% so far in the past month. On August 2, Chesapeake Energy Corporation (NYSE:CHK) posted GAAP actual earnings per share of $8.27 and $2.79 billion in revenue, both above the market consensus.
In its Q1 2022 investor letter, ClearBridge Investments Dividend Strategy mentioned Chesapeake Energy Corporation (NYSE:CHK) and explained its insights for the company. Here is what the fund said:
“In the early days of the invasion, we made two measured changes to the portfolio based on longer-term fallout we anticipate from Russia’s invasion of Ukraine. First, we initiated small positions in U.S. natural gas producers Chesapeake (NYSE:CHK).
Given its superior environmental profile compared to other fossil fuels, we have long favored natural gas in our energy holdings. Combustion of natural gas releases 50% less CO2 than coal, 25% less CO2 than gasoline and dramatically less particulate and pollution, per the U.S. Energy Information Administration. With the advances in shale production this century, the U.S. has become a natural gas powerhouse with some of the lowest-cost and largest reserves in the world. But because natural gas is difficult to ship across the ocean (it must be liquefied, which requires expensive infrastructure on both ends of the voyage), America’s gas bounty has ironically proved a burden for U.S. producers.
The surplus of natural gas in North America has resulted in low prices and weak earnings for gas-focused producers. Exports, while growing, are restrained by the high cost of building export infrastructure. Europe, in a Faustian bargain, has relied on abundant, inexpensive Russian gas transported by pipeline.
Despite the abundance of low-cost resources and a superior environmental profile, the investment case for U.S. natural gas producers was previously unfavorable due to oversupply in the domestic market.
In the days preceding the invasion, we were quick to realize the war would change global energy flows. Europe is shifting away from Russia and toward new sources of imported liquified natural gas. We purchased our stakes in Chesapeake to capitalize on these trends. The recently announced energy pact between the U.S. and Europe represents an early positive datapoint in support of this investment thesis.”
01. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders as of Q2 2022: 72
During the previous quarter, Exxon Mobil Corporation (NYSE:XOM) reached the height of its popularity among hedge funds, with 83 hedge funds holding shares of Exxon Mobil Corporation (NYSE:XOM) as opposed to 72 during the most recent quarter. Rajiv Jain’s GQG Partners is the largest shareholder of Exxon Mobil Corporation (NYSE:XOM), holding 47.497 million of its shares worth roughly $4,069.597 million. The stock has gained 24.80% in the past six months and 54.03% year to date. On July 29, the company posted GAAP actual earnings per share of $4.21 and $115.68 billion in revenue, both above the market consensus. On August 10, Credit Suisse analyst William Janela assumed coverage of Exxon Mobil Corporation (NYSE:XOM) with an Outperform rating and an unchanged price target of $125.
Here is what Saturna Capital Amana Funds has to say about Exxon Mobil Corporation (NYSE:XOM) in its Q4 2021 investor letter:
“Few companies maintain their position at the top for more than a decade or two. One that did was Exxon, which appeared decennially from 1980 through 2010. In 2019 it was ranked 10th, but as of writing has dropped to 39th place.”
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