Expanding its bet on energy infrastructure, Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Energy disclosed on Monday it purchased a 50% stake in the Cove Point liquefied natural gas facility for $3.3 billion in cash.
Having bought the stake from Dominion Energy Inc. (D, Financial), Berkshire Hathaway (BRK.A, Financial)(BRK.B, Financial) will now have a 75% limited partnership stake in the Lusby, Maryland-based facility. According to CNBC, the other 25% is owned by a subsidiary of Brookfield Infrastructure Partners.
After a great 2022, energy stocks overall have taken a beating so far this year as investors have begun to prefer renewable sources like wind and solar over fossil fuels. They have also been impacted by inflation, rising interest rates and other geopolitical conflicts. Year to date, the sector has fallen 1.63%.
Regardless, gurus appear to still be optimistic about the strength of the oil and gas industry according to GuruFocus Hot Picks, a Premium feature based on quarterly 13F filings. The energy companies most-bought by gurus during the first quarter of 2023 included ConocoPhillips (COP, Financial), Chevron Corp. (CVX, Financial), Occidental Petroleum Corp. (OXY, Financial), Coterra Energy Inc. (CTRA, Financial) and Shell PLC (SHEL, Financial).
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
ConocoPhillips
Held by 24 gurus with a combined equity portfolio weight of 22.66%, 12 buys and 10 sells were recorded for ConocoPhillips (COP, Financial) in the first quarter.
The Houston-based oil and gas producer has a $127.94 billion market cap; its shares were trading around $105.73 on Tuesday with a price-earnings ratio of 8.46, a price-book ratio of 2.68 and a price-sales ratio of 1.75.
The GF Value Line suggests the stock is modestly undervalued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
At 90 out of 100, the GF Score indicates the company has good outperformance potential on the back of high ratings for profitability, growth, financial strength, value and momentum.
Of the gurus invested in ConocoPhillips, Dodge & Cox has the largest stake with 1.16% of its outstanding shares. Ken Fisher (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio), Bill Nygren (Trades, Portfolio), the Smead Value Fund (Trades, Portfolio) and Yacktman Asset Management (Trades, Portfolio) also have notable positions.
Chevron
Recording 11 buys and 12 sells for the quarter, 24 gurus are invested in Chevron (CVX, Financial). The combined weight in their equity portfolios is 22.71%.
The oil and gas producer headquartered in San Ramon, California has a market cap of $293.50 billion; its shares were trading around $157 on Tuesday with a price-earnings ratio of 8.48, a price-book ratio of 1.85 and a price-sales ratio of 1.30.
According to the GF Value Line, the stock is modestly undervalued currently.
The GF Score of 86 implies the company has good outperformance potential, driven by high ratings for profitability, growth, financial strength, value and momentum.
With a 6.99% stake, Buffett is Chevron’s largest guru shareholder. Other top guru investors include Fisher, Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Diamond Hill.
Occidental Petroleum
Occidental Petroleum (OXY, Financial), which recorded an equal number of buys and sells for the quarter at 10, is held by 19 gurus with a combined equity portfolio weight of 52.96%.
The Houston-based oil and gas producer has a $53.27 billion market cap; its shares were trading around $59.74 on Tuesdaywith a price-earnings ratio of 6.84, a price-book ratio of 2.61 and a price-sales ratio of 1.66.
Based on the GF Value Line, the stock appears to be modestly overvalued currently.
The GF Score of 74 means the company is likely to have average performance going forward. While it received high ratings for profitability and momentum, the growth and financial strength ranks are more moderate and value is low.
Buffett has the largest stake in Occidental with 25.13% of its outstanding shares. Dodge & Cox, the Smead Value Fund (Trades, Portfolio), Prem Watsa (Trades, Portfolio) and Steven Cohen (Trades, Portfolio) also have significant holdings.
Coterra Energy
With 10 buys and four sells for the quarter, Coterra Energy (CTRA, Financial) is held by 14 gurus. They have a combined equity portfolio weight of 5.65% in the stock.
The oil production company headquartered in Houston has a market cap of $19.68 billion; its shares were trading around $25.98 on Tuesday with a price-earnings ratio of 4.98, a price-book ratio of 1.56 and a price-sales ratio of 2.24.
The GF Value Line suggests the stock is significantly undervalued currently.
Supported by strong ratings for four of the criteria and a more moderate momentum rank, the GF Score of 92 means the company has high outperformance potential.
Holding 0.81% of its outstanding shares, Simons’ firm is Coterra Energy’s largest guru shareholder. The stock is also being held by Diamond Hill, PRIMECAP Management (Trades, Portfolio), Ray Dalio (Trades, Portfolio)’s Bridgewater Associates, Paul Tudor Jones (Trades, Portfolio), Michael Burry (Trades, Portfolio) and a number of other gurus.
Shell
Shell (SHL), which is held by 15 gurus, recorded nine buys and six sells for the three-month period. Their combined equity portfolio weight is 5.02%.
The British oil and gas company has a $201.40 billion market cap; its shares were trading around $60.67 on Tuesday with a price-earnings ratio of 5.03, a price-book ratio of 1 and a price-sales ratio of 0.52.
According to the GF Value Line, the stock is modestly undervalued currently.
The GF Score of 82 indicates the company has good outperformance potential. Although it raked in high ratings for profitability, value and momentum, the growth and financial strength ranks are more moderate.
Fisher is Shell’s largest guru shareholder with a 0.63% stake. Hotchkis & Wiley, Cohen and Richard Pzena (Trades, Portfolio) also have large investments.
Other popular picks
Additional stocks that were popular with gurus during the first quarter included APA Corp. (APA, Financial), SLB (SLB, Financial), Ovintiv Inc. (OVV, Financial), Phillips 66 (PSX, Financial) and Suncor Energy Inc. (SU, Financial).
