In this piece, we will take a look at the 13 best energy stocks to invest in according to hedge funds. If you want to skip our overview of the global energy industry and some latest events, then you can take a look at the 5 Best Energy Stocks To Invest In According to Hedge Funds.
Despite the fact that it is one of the more mature industries in the world, the global energy industry remains as dynamic as ever. Every day investors, analysts, government officials, and members of the press painstakingly go over developments in the energy industry to see if they will have any implications on the global business and economic environments. After all, energy, which constitutes primarily of petroleum products and fuels, is the backbone of the modern day world and without it life as we know would come to a standstill.
This also makes energy stocks quite lucrative when it comes to both share price growth and stability. The general trend on the stock market sees sizeable firms primarily preferred for their safety and stoutness since their markets are not as risky as those for other firms, particularly those that belong to high growth sectors such as technology. While this naturally benefits energy stocks, at the same time, should the cards align, then energy stocks can deliver spectacular returns that are furthered and sweetened by juicy dividends due to the billions of dollars in profit that they make each year. If you're wondering which energy stocks are the most profitable and make the most money, wonder no more and take a look at 12 Most Profitable Energy Stocks.
As an illustration, consider the largest publicly traded energy companies by revenue. The three largest energy stocks in terms of revenue that trade on NYSE are Exxon Mobil Corporation (NYSE:XOM), Shell Plc (NYSE:SHEL), and TotalEnergies SE (NYSE:TTE). The most significant year for the global energy industry in recent times was 2022, and it came just a year after energy stocks nosedived as global demand for their products faltered in the wake of the coronavirus pandemic. The Russian invasion of Ukraine upended the industry as European nations scuttled to find alternative fuel supplies. This saw Exxon, Shell, and Total report record revenues, and their shares jumped in double digit percentages during the early days of the war.
Since then, the global energy market has stabilized and energy stocks have come back to earth. Their revenues have returned to 'normal' readings after a bumper 2022, and in 2024, the outlook for the global energy industry has divided the International Energy Agency (IEA) and the Organization of Petroleum Exporting Countries (OPEC). The IEA's first energy outlook report issued in January 2024 outlined that the agency believes that one of the biggest risks to the global oil industry lies in the escalation of the crisis in the Middle East. What initially started as a devastating attack by Hamas on Israel has now spiralled into a broader low intensity conflict involving the Houthi rebel group attacking global shipping lines and a coalition led by the United States and Great Britain responding by military action. Things came to a head just as the year started after an attack led to U.S. service member deaths and left the world in jitters for a while as it contemplated how the world's most powerful country would respond.
On the other hand, OPEC released an unprecedented report that not only remained optimistic but also attempted to stabilize oil prices. The optimism wasn't unprecedented with the body sharing that it expects non OPEC liquids production to grow this year. It also released an oil industry forecast for 2025, a rare announcement that saw OPEC share a 12 month+ forecast for its industry. This was done to make sure speculators wouldn't be able to inject volatility into oil prices, an occurrence that the Saudis believe was responsible for recent weakness in the oil market. OPEC expects that global oil demand will grow by 1.8 million barrels per day in 2025, bolstered by an economic recovery in China.
With these details in mind, let's take a look at some top energy stocks according to hedge funds, with the notable picks being Occidental Petroleum Corporation (NYSE:OXY), Exxon Mobil Corporation (NYSE:XOM), and Chevron Corporation (NYSE:CVX).
13 Best Energy Stocks To Invest In According to Hedge Funds
A pipeline snaking through a desert canyon, representing a energy's transport infrastructure.
Our Methodology
To make our list of the best energy stocks, we ranked the 40 most valuable energy stocks that traded on NYSE and the NASDAQ by the number of hedge funds that had bought their shares as of Q3 2023. Out of these, the top stocks were selected.
For these best energy stocks, we used hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
13 Best Energy Stocks To Invest In According to Hedge Funds
EOG Resources, Inc. (NYSE:EOG) is an American crude oil and gas company headquartered in Houston, Texas. Amidst a slow season for U.S. oil companies in late 2023, the firm has nevertheless managed to hold the financial front as it has beaten analyst EPS estimates in all four of its latest quarters.
After digging through 910 hedge fund portfolios for Q3 2023, Insider Monkey discovered 45 EOG Resources, Inc. (NYSE:EOG) shareholders. Natixis Global Asset Management's Harris Associates was the firm's biggest investor in our database as it owned 7.9 million shares that are worth $1 billion.
Along with Exxon Mobil Corporation (NYSE:XOM), Occidental Petroleum Corporation (NYSE:OXY), and Chevron Corporation (NYSE:CVX), EOG Resources, Inc. (NYSE:EOG) is a best energy stock according to hedge funds.
Marathon Petroleum Corporation (NYSE:MPC) is a diversified energy company with a presence in several links of the oil supply chain such as refining and transportation. The shares are rated Buy on average, and the average analyst share price target is $173.
During last year's third quarter, 48 out of the 910 hedge funds profiled by Insider Monkey had held a stake in the firm. Marathon Petroleum Corporation (NYSE:MPC) 's largest hedge fund shareholder in our database is the well known activist investor Elliot Singer's Elliott Management due to its $1.6 billion investment.
Shell plc (NYSE:SHEL) is one of the biggest oil companies in the world, and one with retail, exploration, and refining presence across multiple continents. It's also one of the strongest stocks on our list, with the shares being rated as Strong Buy on average and the rating undoubtedly influenced by a net income beat during its latest quarter.
By the end of 2023's September quarter, 49 out of the 910 hedge funds covered by Insider Monkey's research had held a stake in Shell plc (NYSE:SHEL). Ken Fisher's Fisher Asset Management was the firm's biggest stakeholder among these due to its $1.4 billion stake.
Devon Energy Corporation (NYSE:DVN) is a small oil and gas exploration firm headquartered in Oklahoma. Fresh off the press are rumors that the firm is interested in acquiring another U.S. shale oil producer for a $2.9 billion price tag.
For their third quarter of 202 shareholdings, 52 out of the 910 hedge funds tracked by Insider Monkey were the firm's shareholders. Devon Energy Corporation (NYSE:DVN)'s largest hedge fund investor is Donald Yacktman's Yacktman Asset Management as it holds $145 million worth of shares.
Cameco Corporation (NYSE:CCJ) marks a divergence from oil and gas energy stocks on our list as it is the first nuclear technology energy stock so far. It released its fourth quarter of 2023 earnings report in February 2024 which saw the firm substantially grow its revenue to $844 million from the year ago figure of $524 million.
Insider Monkey scoured through 910 hedge fund holdings for Q3 2023 to find 54 Cameco Corporation (NYSE:CCJ) investors. Out of these, the biggest stakeholder is Richard Driehaus's Driehaus Capital as it owns 3.9 million shares that are worth $154 million.
Cheniere Energy, Inc. (NYSE:LNG) is a tertiary energy stock since it owns and operates facilities used to store liquefied natural gas (LNG). After LNG received a boost in 2022, Cheniere Energy, Inc. (NYSE:LNG) has been able to maintain the steam as it has beaten analyst EPS estimates in all four of its latest quarters.
As of September 2023 end, 58 out of the 910 hedge funds profiled had held a stake in Cheniere Energy, Inc. (NYSE:LNG). D. E. Shaw's D E Shaw owned the largest stake which was worth $222 million.
Hess Corporation (NYSE:HES) is a diversified petroleum company with a presence in exploration, production, marketing, and other sectors of the oil industry. It's perhaps one of the most crucial stocks on our list since the firm is due to be acquired by the U.S. oil and gas behemoth Chevron.
During last year's third quarter, 58 out of the 910 hedge funds covered by Insider Monkey's research were the firm's shareholders. Hess Corporation (NYSE:HES)'s biggest investor in our database is Ben Jacbos's Anomaly Capital Management due to its $183 million investment.
ConocoPhillips (NYSE:COP) is a large American oil and gas company headquartered in Houston, Texas. The firm has a global operational footprint, and the firm posted a strong set of results for its fourth quarter of 2023 that saw it beat analyst profit estimates and reward investors through a planned $9 billion share repurchase program.
62 out of the 910 hedge funds part of Insider Monkey's Q3 2023 database had held a stake in ConocoPhillips (NYSE:COP). Natixis Global Asset Management's Harris Associates owned the biggest stake, which came through 13.5 million shares and was worth $1.6 billion.
Occidental Petroleum Corporation (NYSE:OXY), ConocoPhillips (NYSE:COP), Exxon Mobil Corporation (NYSE:XOM), and Chevron Corporation (NYSE:CVX) are some top hedge fund energy stock picks.
