Goldman Sachs Energy Stocks: Top 5 Stock Picks

In this article, we discuss the top 5 Goldman Sachs energy stocks. If you want to read our detailed discussion on the energy sector, head directly to Goldman Sachs Energy Stocks: Top 12 Stock Picks. 

5. Exxon Mobil Corporation (NYSE:XOM)

Goldman Sachs’ Stake Value: $1,683,822,726

Number of Hedge Fund Holders: 71

Exxon Mobil Corporation (NYSE:XOM) is one of the top Goldman Sachs energy stocks. Securities filing for Q2 2023 reveal that Goldman Sachs owned 15.7 million shares valued at $1.68 billion, representing 0.33% of the total portfolio. On August 14, Exxon Mobil Corporation (NYSE:XOM) declared a $0.91 per share quarterly dividend, in line with previous. The dividend is payable on September 11, to shareholders of record on August 16. 

According to Insider Monkey’s second quarter database, 71 hedge funds were long Exxon Mobil Corporation (NYSE:XOM), compared to 73 funds in the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the leading position holder in the company, with 13.3 million shares worth $1.4 billion. 

Here is what First Eagle Investments said about Exxon Mobil Corporation (NYSE:XOM) in its Q2 2022 investor letter:

“Integrated oil and gas giant Exxon Mobil performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industry wide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”

4. SolarEdge Technologies, Inc. (NASDAQ:SEDG)

Goldman Sachs’ Stake Value: $1,717,328,000

Number of Hedge Fund Holders: 43

SolarEdge Technologies, Inc. (NASDAQ:SEDG) is engaged in the design and distribution of optimized direct current (DC) inverter systems for solar photovoltaic setups. In the second quarter of 2023, Goldman Sachs reported owning 14.48 million shares of SolarEdge Technologies, Inc. (NASDAQ:SEDG) worth $1.7 billion, representing 0.34% of the total securities. It is one of the top Goldman Sachs energy stocks. 

On August 1, SolarEdge Technologies, Inc. (NASDAQ:SEDG) reported a Q2 non-GAAP EPS of $2.79, beating market estimates by $0.23. The revenue increased 36.2% year-over-year to $991.29 million. However, it fell short of Street consensus by $4.6 million. 

According to Insider Monkey’s second quarter database, SolarEdge Technologies, Inc. (NASDAQ:SEDG) was part of 43 hedge fund portfolios, compared to 42 in the prior quarter. D E Shaw is the largest stakeholder of the company, with 1.50 million shares worth $404.65 million. 

Here is what ClearBridge International Growth EAFE Portfolio has to say about SolarEdge Technologies, Inc. (NASDAQ:SEDG) in its Q2 2022 investor letter:

“We are well-positioned to participate in the accelerating energy transition. High and rising utility costs combined with policy support are driving increased penetration of home solar plus storage systems in Europe. Israel-based SolarEdge Technologies (NASDAQ:SEDG) expects to see significant growth in solar installations in this market led by Germany and Italy, among others, where consumers are not only demanding solar on the roof but a complete system solution including batteries. This phenomenon is accelerating revenue growth for these companies.”

3. Berkshire Hathaway Inc. (NYSE:BRK-A)

Goldman Sachs’ Stake Value: $2,523,386,666

Number of Hedge Fund Holders: 109

Berkshire Hathaway Inc. (NYSE:BRK-A) participates worldwide in the insurance, freight rail transportation, and utility sectors through its subsidiaries. One of Berkshire Hathaway Inc. (NYSE:BRK-A)’s prominent subsidiary is Berkshire Hathaway Energy, making it a top Goldman Sachs energy stock. Securities filings for Q2 2023 reveal that Goldman Sachs owned 7.4 million shares of Berkshire Hathaway Inc. (NYSE:BRK-A) worth $2.5 billion. 

On August 5, Berkshire Hathaway Inc. (NYSE:BRK-A) reported a Q2 non-GAAP EPS of $6,928.40 and a revenue of $92.50 billion, outperforming Wall Street estimates by $1,375.84 and $11.93 billion, respectively. 

According to Insider Monkey’s second quarter database, 109 hedge funds were bullish on Berkshire Hathaway Inc. (NYSE:BRK-A), compared to 108 funds in the last quarter. Bill & Melinda Gates Foundation Trust is the leading position holder in the company, with 25.14 million shares worth $8.5 billion. 

Here is what Black Bear Value Fund has to say about Berkshire Hathaway Inc. (NYSE:BRK-A) in its Q3 2022 investor letter:

“Going forward I expect Berkshire to compound at above average returns from this price. BRK is a collection of high-quality businesses, excellent management, and a good amount of optionality in their cash position. If the cash were to be deployed accretively, the true value would be greater than an 8% premium (as mentioned above). The combination of a pie that is growing, an increasing share of said pie due to stock buybacks, upside optionality from cash and a tight range of likely business outcomes that span a variety of economic futures gives me comfort in continuing to own Berkshire.”

2. NRG Energy, Inc. (NYSE:NRG)

Goldman Sachs’ Stake Value: $3,354,695,650

Number of Hedge Fund Holders: 39

NRG Energy, Inc. (NYSE:NRG) is an integrated electricity company in the United States. The company’s operations are divided into segments – Texas, East, and West. NRG Energy, Inc. (NYSE:NRG) is one of the top Goldman Sachs energy stocks. In Q2 2023, Goldman Sachs held 31.7 million shares of NRG Energy, Inc. (NYSE:NRG) worth $3.35 billion, representing 0.67% of the total securities. 

On July 18, NRG Energy, Inc. (NYSE:NRG) declared a $0.3775 per share quarterly dividend, in line with previous. The dividend was distributed to shareholders on August 15. 

According to Insider Monkey’s second quarter database, NRG Energy, Inc. (NYSE:NRG) was part of 39 hedge fund portfolios, compared to 29 in the last quarter. Permian Investment Partners is the leading position holder in the company, with nearly 6 million shares worth $223.18 million. 

Legacy Ridge Capital made the following comment about NRG Energy, Inc. (NYSE:NRG) in its Q4 2022 investor letter:

“NRG Energy, Inc. (NYSE:NRG) was covered in the 2019 letter with VST. We sold the shares as COVID induced volatility presented better risk/reward opportunities, but never subsequently repurchased shares—as we did with VST. Not only do we think VST is a better value, but the management team at NRG appears to have gone astray. Despite coming to his position during an activist campaign by Elliott Management in 2017, when the prior empire-building CEO was shown the door, the replacement CEO has seemingly embarked on the same failed strategy. In early December they announced the purchase of Vivint Smart Home, a smart home platform company, for $2.8 billion. The transaction diversifies NRG’s business, increases leverage, dramatically reduces intermediate-term shareholder capital returns, and most importantly, is the opposite of what management told us they were going to do when they assumed the role in 2017. The stock fell 15% on the day of the announcement and is down another 5% since then, and now 10% lower than when we first wrote about it. We like the generation business at NRG and the valuation is almost back to interesting, but we’d probably have to see turnover in the C-suite and a refreshed corporate strategy to reignite our enthusiasm.”

1. Tesla, Inc. (NASDAQ:TSLA)

Goldman Sachs’ Stake Value: $3,612,445,451

Number of Hedge Fund Holders: 79

While Tesla, Inc. (NASDAQ:TSLA) is largely popular for being an EV market leader, the company is also involved in energy generation and storage systems. Tesla, Inc. (NASDAQ:TSLA)’s Energy Generation and Storage division is responsible for creating, setting up, and marketing solar energy generation for residential, commercial, industrial clients, and utility companies. It is one of the top Goldman Sachs energy stocks. The firm owns a $3.6 billion position in Tesla, Inc. (NASDAQ:TSLA). 

On July 19, Tesla, Inc. (NASDAQ:TSLA) announced a Q2 non-GAAP EPS of $0.91 and a revenue of $24.93 billion, outperforming Wall Street estimates by $0.09 and $200 million, respectively. 

According to Insider Monkey’s second quarter database, 79 hedge funds were long Tesla, Inc. (NASDAQ:TSLA), compared to 82 funds in the earlier quarter. Cathie Wood’s ARK Investment Management is a prominent stakeholder of the company, with 4.8 million shares worth $1.26 billion. 

Baron Opportunity Fund made the following comment about Tesla, Inc. (NASDAQ:TSLA) in its Q1 2023 investor letter:

“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells EVs, related software and components, and solar and energy storage products. Following a sharp decline at the end of 2022, Tesla’s stock rebounded in the first quarter of 2023 on investor expectations that Tesla will continue to grow vehicle deliveries and maintain solid gross and operating margins despite a potential recession, competition in China, and vehicle price reductions. We wrote a long piece on Tesla last quarter and refer readers back to it, because for long-term investors not much has changed over the last three months. Tesla did hold its first Investor Day in March, and several Baron analysts and portfolio managers attended. We toured the Austin Gigafactory, drove in a Cybertruck, boarded a Semi truck, and spoke with a wide swath of Tesla senior managers. During the formal presentation, Tesla highlighted, among other things: (1) its broad and deep bench of executive talent supporting CEO Elon Musk; (2) its “Master Plan 3–Sustainable Energy for All of Earth,” which featured EVs, renewable power from solar and wind, and stationary electric storage; (3) its vehicle assembly innovations, including massive casted parts (building Model Y bodies with single front and rear castings, replacing a substantial number of parts and fastening steps), a stainless steel exoskeleton (for Cybertruck), and its next-generation highly efficient “unboxed process” for its next-gen $25,000 vehicle; (4) a future permanent[1]magnet electric motor that will not require any rare earths; and (5) the massive untapped market opportunity for commercial stationary electric storage, branded Megapack, as the world steadily shifts to renewable energy. As long-term shareholders, we have witnessed Tesla exploit its innovative Model 3/Y now-global mass-market platform to increase vehicle deliveries from barely a standing start to over 1.3 million units, while achieving industry-leading margins and reinforcing its iron-clad balance sheet to almost $23 billion in cash (and effectively no recourse debt). We expect Tesla’s next-generation EV and Megapack products to have a similar impact on company results.”

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