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ConocoPhillips (NYSE:COP), Phillips 66 (NYSE:PSX), and Devon Energy Corporation (NYSE:DVN) represent some of the biggest purchases of energy stocks made by Louis Navellier’s Navellier & Associates during the first quarter of 2022.
Louis Navellier is the founder and chairman of Reno, Nevada-based money management firm Navellier & Associates. The fund employs a disciplined, bottom-up approach to selecting stocks that first measures their relative risk and reward profiles before delving into the most intriguing stocks’ fundamentals.
Navellier is a frequent contributor to business shows on CNBC, Fox News, and Bloomberg, and publishes multiple newsletters annually which share his investment philosophies and insights as they particularly relate to growth investing. Navellier received a B.S. in business administration from California State University in 1978, followed by an M.B.A. in finance in 1979.
Louis Navellier of Navellier & Associates
Navellier & Associates’ Large Cap Growth portfolio has been on a roll in recent years, returning 17.11% last year, 33.27% in 2020, and 32.71% in 2019. The first quarter of this year was a rough one for the portfolio however, as it lost 15.55%. That underperformance contributed to the value of Navellier’s 13F portfolio declining to $588 million by the end of Q1, down from $687 million at the end of 2021.
With that Q1 performance in mind, Navellier took several steps to change his fund’s fortunes during the first quarter, most notably investing heavily in energy stocks, which he had previously had minimal exposure to. The fund sold off 80 of its former long positions during the quarter, while adding 55 new holdings to its portfolio, cutting its exposure to healthcare and tech stocks, while building its exposure to energy and materials companies.
We’ll take a look at some of Navellier & Associates’ biggest energy purchases made during Q1 in this article.
Our Methodology
The following data is gathered from Navellier & Associates’ latest 13F filing with the SEC. We follow hedge funds like Navellier & Associates because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.
All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q1 2022 reporting period.
Louis Navellier is Buying These 10 Energy Stocks in 2022
10. Tenaris S.A. (NYSE:TS)
Value of Navellier & Associates‘ 13F Position: $1.83 million
Number of Hedge Fund Shareholders (as of March 31): 19
ConocoPhillips (NYSE:COP), Phillips 66 (NYSE:PSX), and Devon Energy Corporation (NYSE:DVN) are among the prominent energy stocks that Louis Navellier was buying during the first quarter. A less heralded energy name that also attracted his attention was Tenaris S.A. (NYSE:TS), as Navellier bought 60,875 shares of the company.
A supplier of steel pipes and other products and services for the energy industry, Tenaris S.A. (NYSE:TS) is benefiting from the increased demand for its services that has resulted from the Ukraine conflict, as North American drilling activity picks up pace. The company earned an impressive $0.85 per share in Q1 thanks to better than expected pricing, and also beat revenue estimates, hauling in $2.37 billion.
Tenaris S.A. (NYSE:TS) has been trading at a significant discount to some of its biggest oilfield services peers, which has mystified Piper Sandler analyst Ian Macpherson. The analyst has an ‘Overweight’ rating and $60 price target on TS shares, suggesting greater than 100% upside.
9. Chevron Corporation (NYSE:CVX)
Value of Navellier & Associates‘ 13F Position: $1.96 million
Number of Hedge Fund Shareholders (as of March 31): 56
Navellier hiked the size of its Chevron Corporation (NYSE:CVX) holding by 37% during the first quarter, building up a stake consisting of 12,007 shares. 56 hedge funds were long CVX on March 31, unchanged quarter-over-quarter.
Chevron Corporation (NYSE:CVX) shares have gained 39% in 2022 thanks to ballooning oil prices that have sent the company’s income and free cash flow soaring. Chevron pulled in $6.3 billion in net income during Q1, a 350% year-over-year increase, while its free cash flow hit $6.1 billion, approaching record territory.
Chevron Corporation (NYSE:CVX) was one of the top quarterly performers for the ClearBridge Investments Large Cap Value Strategy, which had this to say about the company and energy sector in its Q1 2022 investor letter:
“The energy sector, which led a strong market in 2021, generated even more dramatic relative performance in the quarter, advancing 39% and leading the benchmark Russell 1000 Value Index. Years of restrained investment in the energy sector, combined with a strong post-pandemic recovery, contributed to the higher commodity prices. The upward pressure escalated with the Russian invasion of Ukraine. Our energy holding Chevron (NYSE:CVX) benefited from higher commodity prices and was among the top contributors to first-quarter performance.”
8. TotalEnergies SE (NYSE:TTE)
Value of Navellier & Associates‘ 13F Position: $2.86 million
Number of Hedge Fund Shareholders (as of March 31): 20
Navellier & Associates added a new position in TotalEnergies SE (NYSE:TTE) to its 13F portfolio during Q1, buying 56,563 shares. Zach Schreiber’s Point State Capital was among the group of other hedge funds that also added TTE to their portfolios during the quarter.
TotalEnergies SE (NYSE:TTE) offers a compelling mix of oil, LNG, and renewables for investors. The global energy major, which is based in France, is making significant investments in clean energy, with plans for 100 gigawatts of renewable power generation by the end of the decade. The company has already won the rights to several projects this year that will result in the development of more than 5 gigawatts of offshore wind power.
TotalEnergies SE (NYSE:TTE) also boasts a solid dividend that currently yields 3.84%. The company impressed investors back in the early days of the pandemic with its commitment to maintaining its dividend, saying that as long as oil stayed above $40 per barrel, its dividend would not be touched. That was in sharp contrast to European peers like BP and Shell, which quickly slashed their own dividends.
7. BP plc (NYSE:BP)
Value of Navellier & Associates‘ 13F Position: $3 million
Number of Hedge Fund Shareholders (as of March 31): 27
The aforementioned BP plc (NYSE:BP) also landed on Louis Navellier’s buying list during Q1, as his fund took a new stake of 101,897 shares in the London, England-based oil and gas supermajor. Hedge fund ownership of BP is near all-time lows, with just 27 funds owning BP shares on March 31.
As with TotalEnergies, BP plc (NYSE:BP) has also sought to improve its image and develop a greater focus on renewables, even going so far as to try and drum up the new acronym-based nickname Beyond Petroleum. BP recently sold its 50% stake in the Sunrise project in Alberta’s oilsands, becoming the latest oil giant to divest assets in the region as it seeks to focus more investments on renewables like hydrogen. In return for its oilsands stake, BP acquired the rights to an unlaunched offshore drilling project off the coast of Newfoundland.
BP plc (NYSE:BP)’s net debt was lowered for the eighth consecutive quarter during Q1, falling to $27.5 billion thanks to the company generating $4.1 billion in surplus cash flow during the quarter. The company had earmarked $2.5 billion of that windfall towards executing share buybacks in the current quarter as part of its 2022 goal to allocate 60% of surplus cash flow towards buybacks.
6. Antero Resources Corp (NYSE:AR)
Value of Navellier & Associates‘ 13F Position: $3.23 million
Number of Hedge Fund Shareholders (as of March 31): 53
Closing out the first half of the list is Antero Resources Corp (NYSE:AR), which Navellier’s fund made a modest purchase of during Q1, hiking the size of its AR holding by 2% to 105,854 shares. The exploration and production company has exploded in popularity among hedge funds over the past six quarters, with ownership of the stock rising by 130% during that time.
As with BP, Antero Resources Corp (NYSE:AR) has also earmarked a portion of its free cash flow towards share repurchases, with the current rate being 25% of FCF. Once the borrowings on its credit facility are repaid, which is anticipated to occur in the current quarter, the company plans to raise that rate to 50%. Antero expects to generate more than $2.5 billion in FCF in 2022 and expects to average about the same amount annually through 2026 (at current commodity prices).
Antero Resources Corp (NYSE:AR) was just one of many energy stocks that Louis Navellier was buying during Q1. In the second part of this article we’ll analyze his purchases of ConocoPhillips (NYSE:COP), Phillips 66 (NYSE:PSX), and Devon Energy Corporation (NYSE:DVN), among others.
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Disclosure: None. Louis Navellier is Buying These 10 Energy Stocks in 2022 is originally published at Insider Monkey.
