We recently published a list of 12 Best Oil and Gas Penny Stocks to Invest in Now. In this article, we are going to take a look at where Cosan S.A. (NYSE:CSAN) stands against other best oil and gas penny stocks to invest in now.
The oil and gas sector faces a pivotal moment in 2025 as it deals with complex dynamics from global tensions, evolving policy directions, and rising innovation. The stable pricing in 2024, after many decades, now faces hurdles due to geopolitical stresses, energy transition demands, and economic shifts. Companies are keeping tight capital control while boosting tech productivity, as analysts predict oil will stay between $70 and $80 per barrel. However, geopolitical instability and unpredictability could push prices higher.
Despite these obstacles, operations have advanced as the sector’s capital spending has increased 50% from 2020. Meanwhile, returns are on the upswing as businesses focus on high-performing assets and refine their portfolios. Many companies are betting on digital and green tech—carbon capture, hydrogen, and data-driven exploration—as part of a wider clean energy push. Global oil trade issues have shifted focus to natural gas as a second key revenue source, thus, gas prices have jumped lately. According to Yahoo Finance data, LNG futures are up nearly 40% in six months and 91.65% year-over-year at Henry Hub, thanks to low stockpiles, winter demand, and rising LNG exports.
Although market instability persists, as recent OPEC+ supply boost and US-China trade tensions have pushed down crude prices. As of April 2025, West Texas Intermediate (WTI) crude sits near a three-year low of $61.5 per barrel. The US Energy Information Administration (EIA) sees an average of $63.88/bbl this year, further dropping to $57.48 in 2026. This decline, plus tariff hurdles and export problems, might squeeze US oil output since profit thresholds sit between $61-$70/bbl. This shows how even major forecasters are scaling back amid trade fights and project holdups.
Now, the trend has shifted to natural gas as the growth driver for the oil and gas industry. Europe remains central to global LNG trade, taking 55% of US LNG exports in 2024, per LSEG data. As seen last December, 69% of US LNG shipments (5.84 MT) went to Europe, up from November’s 5.09 MT, driven by winter needs and limited Russian supply. As trade tensions add complications, China’s 15% tariff on US LNG threatens new deals despite existing contracts.
The outlook is mixed but hopeful as oil demand rebounds post-pandemic and a global boost in energy diversification. Although solar energy helps reduce fossil fuel dependence, it won’t replace it entirely, which shows the significance of a harmonized energy mix. In the same way, the main alternatives—solar, wind, and nuclear—each have scaling or consistency limits. Oil and gas, especially natural gas, remain vital to global growth and energy security, creating openings for agile, cost-effective penny stocks.
While major companies grab headlines with billion-dollar projects, penny stocks—small-cap oil and gas companies trading under $5—attract interest for their high-growth potential.
Our Methodology
We first sifted through ETFs, online rankings, and internet lists to compile a list of the best oil and gas stocks under $5. We then selected the 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. For tied stocks, we ranked them by the value of their hedge fund stakes. The hedge fund data was sourced from Insider Monkey’s database, which tracks the moves of over 1000 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A petrol tanker truck refueling a highway service station, highlighting the fuel distribution arm of the company.
Cosan S.A. (NYSE:CSAN)
Number of Hedge Fund Holders: 14
Share Price as of April 16: $4.76
Cosan S.A. (NYSE:CSAN), a Brazilian powerhouse for energy and logistics, specializes in operations like fuel distribution, natural gas infrastructure, ethanol and bioenergy production, and logistics. It works through companies like Raízen, Compass, and Moove across the oil and gas sector, distributing fuel, selling electricity and natural gas, and running gas terminals. Moreover, the Compass segment is working to expand gas pipelines throughout Brazil, helping with long-term clean energy goals.
For the year ended December 31, 2024, Cosan S.A. (NYSE:CSAN) brought in about $6.1 billion in portfolio EBITDA, showing strength in most areas. Although it suffered a net loss of around $183 million due to one-time events and write-downs from selling its Vale stake. The company’s corporate debt hit $4.8 billion, with a debt coverage ratio of 1.1x, below its target of 1.5x.
Despite weather problems impacting Raízen’s sugar and ethanol production, other divisions like Rumo and Compass did well. Where Rumo achieved record results from higher rates and increased shipping volumes, Compass grew its gas distribution and continued ramping up Edge, its gas terminal. Additionally, Moove increased revenues through better supply chain management, despite fewer sales overall.
Going forward, Cosan S.A. (NYSE:CSAN) aims to cut its holding company debt by at least 30% after selling its Vale stake in January 2025. It is reviewing Raízen’s assets, simultaneously looking for strategic partners in electricity and renewables. Although the company won’t issue new shares, it might sell certain assets to improve financial discipline and cash flow.
Overall, CSAN ranks 10th on our list of best oil and gas penny stocks to invest in now. While we acknowledge the potential of CSAN as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CSAN but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
