Below you can find the list of the top 5 oil stocks to buy now. For a detailed discussion as well as a more comprehensive list, please see 10 Best Oil Stocks To Buy Now.
5. Nobel Energy (NBL):
Number of Hedge Funds: 45
Total Value of Hedge Fund Holdings: $754 million
Fourth Quarter Return: NA
Notable Hedge Fund Holders: Water Island Capital
Earlier in October Chevron completed the acquisition of Nobel Energy. You can consider this as another vote for Chevron shares. Here is what Chevron said about this acquisition:
“We are pleased to welcome Noble Energy’s employees and shareholders to Chevron. Noble’s high-quality assets complement Chevron’s advantaged upstream portfolio, and the combination is expected to deliver strong financial benefits,” said Chevron Chairman and CEO Michael Wirth. “With an industry-leading balance sheet and a track record of capital discipline, we believe we’re in a different place than others and can protect the dividend while driving long-term value.””
4. ConocoPhillips (COP)
Number of Hedge Funds: 45
Total Value of Hedge Fund Holdings: $829 million
Fourth Quarter Return: 34%
Notable Hedge Fund Holders: Donald Yacktman
In May ConocoPhillips saw its first insider purchase since 2017. One of its directors paid $41 per share for 2400 shares. We previously highlighted COP in Billionaire Ken Fisher’s Dividend Stock Picks article.
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3. Concho Resources Inc. (CXO)
Number of Hedge Funds: 47
Total Value of Hedge Fund Holdings: $732 million
Fourth Quarter Return: 44.1%
Notable Hedge Fund Holders: D.E. Shaw
ConocoPhillips is in the process of acquiring Concho Resources. CXO shareholders will receive 1.46 COP shares for every CXO shares they have. COP shares closed at $43.48 on Friday. This means Each CXO share is worth $63.48, vs. its closing price of $63.27. Instead of investing in COP, investors can generate slightly higher returns by buying CXO shares (assuming that the deal closes quickly.
2. Exxon Mobil Corporation (XOM)
Number of Hedge Funds: 52
Total Value of Hedge Fund Holdings: $1.38 billion
Fourth Quarter Return: 30.7%
Notable Hedge Fund Holders: Renaissance Technologies
First Eagle Investment Management shared its views on XOM in its Q3 investor letter:
“The stock of Exxon Mobil continued to struggle in the third quarter, and it lost roughly half its market cap year to date. Despite this, we believed Exxon Mobil was well-equipped to contend with lower prices and remained a compelling investment. The company demonstrated high levels of operational flexibility during the difficult market environment and maintained an upward drift in earnings power. Its high-quality, long-duration assets occupy attractive positions on the cost curve.”
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1. Schlumberger Limited (SLB)
Number of Hedge Funds: 53
Total Value of Hedge Fund Holdings: $1.03 billion
Fourth Quarter Return: 48.3%
Notable Hedge Fund Holders: Ken Fisher
Multiple insiders have been buying SLB shares throughout 2020. One insider paid as low as $13.77. SLB shares currently trade above $22 and returned 48% so far in Q4. The stock was trading above $40 earlier this year, so it still has a long way to go to capture its 2020 losses. Here is what First Eagle said about SLB in its Q3 letter:
“Oilfield services giant Schlumberger struggled to gain traction following the initial pandemic-related selloff of the first quarter. The company has been aggressive in cutting costs in response to the difficult operating environment; it has slashed about 25% of its workforce, reduced its dividend and sold off assets, including its North American hydraulic fracking business. We see Schlumberger’s financial strength and dominant market position as sources of resilience that may potentially enable it to respond positively if and when oil prices rebound.”
Please also see 10 best value stocks to buy now and 10 best growth stocks to buy
