We recently published a list of the 15 Small-Cap Energy Stocks Hedge Funds Are Buying. In this article, we are going to take a look at where Woodside Energy Group Ltd (NYSE:WDS) stands against other small-cap energy stocks.
On April 12, Bill Perkins, Skylar Capital Management CEO, appeared on ‘Closing Bell Overtime’ on CNBC to talk about how the energy sector is struggling due to fears of decreased fuel demand. Perkins discussed that the trade policy majorly drives the sentiment across the energy landscape and hence affects natural gas, energy stocks, bonds, and other related assets. Noting the difficulty in predicting the long-term outcome of these policies, he questioned whether the tariffs are temporary. The conversation then shifted to the impact of recent tariff announcements. Perkins acknowledged that natural gas prices initially performed better than other commodities following the announcements, which gives rise to speculations that LNG could become a key bargaining chip in future trade negotiations. He explained that, at the time, natural gas fundamentals were strong, and the US had the potential to use LNG exports as a diplomatic tool to help reduce trade deficits with other countries.
However, Perkins acknowledged that the overarching macroeconomic fear of a global slowdown soon overshadowed these fundamentals, which affected both the crude oil and natural gas markets. As a result, prices dropped to levels that might stimulate some demand and offer a buffer against further declines, particularly if the tariff conflict drags on and risks pushing the economy into a recession or even a depression. Perkins also addressed the effect of price pressure on production, specifically referencing West Texas Intermediate (WTI) crude oil. He pointed out that WTI prices had reached a threshold (~$60 per barrel) where growth in the Permian Basin would likely halt or even decline. At these price levels, producers become reluctant to invest in new drilling, especially given the backwardated crude curve, which showed future prices at $58 to $59 per barrel. This scenario would not only limit oil production growth in the Permian but also reduce the output of associated natural gas from the region. Perkins described this production restraint as a bullish factor that could help offset some of the prevailing uncertainty.
Perkins predicted that oil and gas executives would adopt a cautious tone in their commentary. He explained that, due to the unpredictability of the global macro environment, executives would likely let market signals guide their decisions about ramping up or scaling back drilling programs.
Our Methodology
We first sifted through the Finviz stock screener and Insider Monkey’s Q4 2024 hedge funds database. For this article, we define small-cap stocks as those that trade between $10 billion and $30 billion. We then selected the top 15 stocks according to hedge funds and ranked them in ascending order of the number of hedge funds that have stakes in them. In cases where an equal number of hedge funds held two or more stocks, we used the market cap as a tiebreaker.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is Woodside Energy Group Ltd. (NYSE:WDS) a Small-Cap Energy Stock Hedge Funds Are Buying?
A worker in safety gear with a drill rig in a sprawling oilfield.
Market Capitalization as of April 25: $24.45 billion
Number of Hedge Fund Holders: 10
Woodside Energy Group Ltd (NYSE:WDS) explores, evaluates, develops, produces, markets, and sells hydrocarbons in the Asia Pacific, Africa, the Americas, and Europe. It produces liquefied natural gas, pipeline gas, crude oil and condensate, and natural gas liquids. It also develops new energy products and lower-carbon services.
Woodside’s strategic focus is its Louisiana LNG project. It has secured a $5.7 billion investment from Stonepeak for a 40% stake in the infrastructure for the Louisiana LNG project. This capital will cover 75% of the project’s capital expenditure in both 2025 and 2026, which will then enhance near-term capacity for shareholder distributions.
The project benefits from a Foreign-Trade Zone, which allows for the deferral of tariff payments until each LNG train is complete. Woodside Energy Group Ltd (NYSE:WDS) also signed a long-term LNG sale and purchase agreement with Uniper for the supply of ~2 million tonnes per annum, which will commence with Louisiana LNG’s commercial operations date.
Overall, WDS ranks 15th on our list of the small-cap energy stocks hedge funds are buying. While we acknowledge the growth potential of WDS as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than WDS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
