We recently compiled a list of the 10 Stocks Set to Explode in 2025. In this article, we are going to take a look at where Chord Energy Corporation (NASDAQ:CHRD) stands against the other stocks set to explode in 2025.
“Big Technology are The New Defensives” Strategist Says
As the Magnificent Seven continues to release earnings for the fiscal third quarter of 2024, investors are keen to see if the group can maintain their market leading position and exemplary performance. On October 25, Nancy Tengler, Laffer Tengler Investments CEO & Chief Investment Officer, appeared in an interview on Yahoo Finance to share her market thesis on big tech amid current market conditions.
Tengler suggests that names in big technology boast reliable earnings growth, fitting the basic criteria of such. She adds that she would much rather own big tech names than invest in traditional defensive stocks despite a sluggish economic backdrop. Tengler reiterates her bullish stance on the sector claiming that big technology names are the new defensive and hold much stronger positions in the market.
She emphasized that these names have large cash flow reserves, oftentimes, bigger than most countries. Tengler highlights that she is not bullish on all of the names in the magnificent seven and stresses that she has expanded her exposure to the tech sector, adding new stocks to her portfolio. However, at the same time, there are several names within the magnificent seven that cannot be ignored or argued against. She also suggests that investors must seek to invest and own a select few among the group, instead of owning all of them.
She shares that she was previously pessimistic about certain names she held and emphasized that she will focus on margins for certain stocks among the Mag Seven moving forward. Tengler also adds that while these companies have been criticized for pouring billions into capital expenditures, certain names are expected to benefit immensely from AI monetization and their unique cloud services and products.
While many characteristics define exploding stocks, some key traits involve an expanding customer base, improving monetization of offerings, increasing cash flows, and strong fundamentals. Biotech, electric vehicles, artificial intelligence, and cloud are among the few high-growth markets expected to blow up in the coming years. Within these sectors, certain names have been performing exceptionally well in the current market rally and are expected to outperform in 2025.
Our Methodology
To come up with 10 stocks set to explode in 2025, we consulted financial media to shortlist stocks that are expected to perform exceptionally well according to analysts and strategists. After consulting 10 similar rankings on the internet we examined the Street-High upside for each stock and picked the ones with the highest upside, as of October 27, 2024. Our list is in ascending order of the street high upside as of October 27, 2024. We have also mentioned the hedge fund sentiment for each stock.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Is Chord Energy Corporation (CHRD) Set to Explode in 2025?
An aerial view of the energy producing facility, highlighting its potential of providing utilities to the public.
Chord Energy Corporation (NASDAQ:CHRD) is a hydrocarbon exploration and hydraulic fracturing company headquartered in Texas, United States. The company has an immense focus on acquiring and developing oil and natural gas properties.
In the second quarter of 2024, the company generated revenue worth $1.26 billion, up by 38.22% year-over-year, primarily driven by solid well performance. According to the company’s CEO, efficient production levels and strategic cost control improved free cash flow levels, exceeding overall expectations.
Following the partnership with Enerplus, Chord Energy Corporation (NASDAQ:CHRD) revised its guidance for the complete fiscal year 2024. Now, the company expects to generate $1.2 billion of adjusted free cash flow, boasting a re-investment rate of 55%. In addition to that, adjusted EBITDA is expected to reach $2.9 billion.
On the energy front, the company released its 2023 sustainability report recently, advancing its position in the industry. For the fiscal year ended 2023, Chord Energy Corporation (NASDAQ:CHRD) saw a 9% decrease in scope 1 GHG emissions intensity, compared to 2022, and a 57% decline relative to 2019. In addition to that, the company also posted a 44% decrease in scope 1 methene emissions intensity compared to 2022, and a 70% decline compared to 2019. To align with its corporate social responsibility goals, the company donated $1 million to charitable organizations in the education, environment, and mental health domains.
Overall, Chord Energy Corporation (NASDAQ:CHRD) has strong fundamentals and an attractive position in the industry. CHRD also expects to make capital investments and increase production, positioning the company for long-term sustainable growth.
Madison Investments’ Madison Small Cap Fund stated the following regarding Chord Energy Corporation (NASDAQ:CHRD) in its first quarter 2024 investor letter:
“Our Energy underweight was also a slight drag, although we are optimistic about our singular investment in this sector with Chord Energy Corporation (NASDAQ:CHRD). During Q1 the company announced a strategic combination with Canadian-based Enerplus Corporation (TSX: ERF). Enerplus is one of, if not the best remaining assets in the Bakken and we are very constructive on the financial and strategic merits of this transformational deal. CHRD will become the largest operator in the Bakken, representing about 12% of the basin’s production. With a solid balance sheet post deal, CHRD will now be in the enviable position of either the basin’s main consolidator or most strategic asset as a target for larger E&P companies.”
Overall, CHRD ranks 5th among the 10 stocks set to explode in 2025. While we acknowledge the potential of CHRD as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CHRD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
