Below we look at why Louis Navellier is Buying These 5 Energy Stocks in 2022. For our methodology and a more comprehensive list please see Louis Navellier is Buying These 10 Energy Stocks in 2022.
5. Phillips 66 (NYSE:PSX)
Value of Navellier & Associates‘ 13F Position: $4.74 million
Number of Hedge Fund Shareholders (as of March 31): 43
Louis Navellier’s Navellier & Associates massively raised its stake in Phillips 66 (NYSE:PSX) during the first quarter, adding 1,424% more shares to its position to lift it to 54,856 total. Fellow hedge fund titans Cliff Asness and Stanley Druckenmiller also bought boatloads of PSX shares during the quarter.
Phillips 66 (NYSE:PSX) is largely known for its refining operations and higher gas prices are greatly improving the margins on its refining business, generating far more free cash flow for the company. Phillips plans to use that extra cash to pay down its debt, buy back more shares, and continue to raise its dividend, which already has a long history of solid growth.
Phillips 66 (NYSE:PSX)’s results were down across the board quarter-over-quarter during Q1, but the company still managed operating cash flow of $1.1 billion. Adjusted earnings came in at $1.32 per share, down by $703 million quarter-over-quarter. Phillips also had a $100 million quarterly swing in its hedges, losing $50 million in Q1 after gaining $50 million in Q4.
4. Devon Energy Corporation (NYSE:DVN)
Value of Navellier & Associates‘ 13F Position: $5.81 million
Number of Hedge Fund Shareholders (as of March 31): 66
Devon Energy Corporation (NYSE:DVN) is yet another energy stock that Louis Navellier was investing money into during Q1, building a new stake in the company that contained 98,333 shares. There was a 27% surge in hedge fund ownership of DVN during the first quarter.
Devon Energy Corporation (NYSE:DVN) made a move that’s been widely praised by investors when it acquired RimRock Oil and Gas’s leasehold interest and related assets in North Dakota’s Williston Basin for $865 million. It’s estimated that the deal will deliver a free cash flow yield of more than 25% over the next year at expected oil prices.
Devon Energy Corporation (NYSE:DVN) maintains one of the best balance sheets in the industry even following that cash transaction, and is also poised to return plenty of money to shareholders in the coming quarters through its fixed-plus variable dividend program. Its latest payments equated to an annualized dividend yield of 6.5%.
3. Marathon Oil Corporation (NYSE:MRO)
Value of Navellier & Associates‘ 13F Position: $5.96 million
Number of Hedge Fund Shareholders (as of March 31): 43
Marathon Oil Corporation (NYSE:MRO) didn’t attract as much hedge fund attention as Devon Energy did during Q1, but it certainly captured the imagination of Navellier, who added 237,193 shares of MRO to his fund’s 13F portfolio during the quarter.
Unlike Phillips 66 and many other oil companies, which limit their quarterly instability and uncertainty by locking in hedges on oil prices, Marathon Oil Corporation (NYSE:MRO) had little hedging activity, making it more sensitive and poised to benefit from this year’s rising prices.
Another interesting facet to the Marathon Oil Corporation (NYSE:MRO) story in 2022 is that the company is tax shielded this year following its substantial losses in past years. That means it will be able to return even more of its potentially sizable windfall this year to shareholders. Those tailwinds helped push MRO shares up by over 90% through June 7, though they’ve declined by 25% since then, opening up a more reasonable entry point for investors.
2. EOG Resources, Inc. (NYSE:EOG)
Value of Navellier & Associates‘ 13F Position: $8.56 million
Number of Hedge Fund Shareholders (as of March 31): 51
EOG Resources, Inc. (NYSE:EOG) was already a stalwart member of Louis Navellier’s 13F portfolio heading into 2022 and became even further entrenched after the money manager raised his position in the company by 151% during the first quarter. Yet while most energy stocks were gaining hedge fund ownership during Q1, EOG actually suffered a small 6% decline.
EOG Resources, Inc. (NYSE:EOG) is no different from the majority of other energy names on this list, as it’s currently awash in cash and set to make its shareholders very happy this year. In addition to its $0.75 quarterly dividend payments, EOG is also making special dividend payments that send some of its excess cash over to shareholders. Its latest such payment came in at $1.80 per share.
EOG Resources, Inc. (NYSE:EOG) is not only benefiting from the skyrocketing oil prices, but also from its own substantial operational improvements. EOG shuttered many of its underperforming wells at the height of the pandemic and the effect on the company’s operating margin has been tremendous. EOG has pushed its operating margin up by more than 900% from its pandemic low, hitting 43.15% on that front in the latest quarter.
1. ConocoPhillips (NYSE:COP)
Value of Navellier & Associates‘ 13F Position: $12.39 million
Number of Hedge Fund Shareholders (as of March 31): 68
Topping the list of Louis Navellier’s biggest energy buys of Q1 is ConocoPhillips (NYSE:COP), which now ranks as the fund manager’s third favorite stock. Navellier raised his stake in COP by 130% during the first quarter, lifting the size of his position to 123,931 shares.
ConocoPhillips (NYSE:COP) is highly efficient when it comes to finding and producing oil and gas, which is the company’s specialty. It was one of the few energy companies that was free cash flow positive in 2020, and needless to say, it’s growing more prosperous by the day. Conoco grew its earnings by a tremendous 370% during the first quarter, thanks to its average realized oil price rising by 70% during that time to $76.99 per barrel.
ConocoPhillips (NYSE:COP) has also adopted the fixed plus variable dividend payouts standard that numerous other energy companies are now utilizing. The company’s latest fixed quarterly dividend payment was $0.46, while its variable payment was $0.70. All told, those payments equated to an annualized dividend yield of nearly 5%.
For more on the latest trades made by some of the biggest hedge fund managers in the world, check out 10 Best Automation Stocks To Buy Now and Top 10 Stocks to Buy Today According to Kerr Neilson’s Platinum Asset Management.
Disclosure: None.
