The best performing stocks in the market are usually the highest growing stocks or the stocks with the highest expected growth rates. This doesn’t mean that one should be invested in growth stocks and stay away from the value stocks at all times. Historically value stocks managed to beat the growth stocks hand over fist. The reason is simple. Value stocks are beaten down stocks with very low or negative growth expectations. Not surprisingly it is easier for these stocks to beat the expectations on the average. On the other hand, everybody is extremely bullish about growth stocks and expect them to have higher growth rates in the future. Their stock prices also reflect this fact. Not surprisingly, it is more difficult for these stocks to beat these challenging expectations.
We ranked energy companies based on their expected five-year growth rates. The data source for Wall Street Analysts’ projections is Thomson Financial. Contrarian investors should look into the stocks that are at the top of the table.
Company name | Symbol | Market Cap | Forward PE | Expected 5-Year Growth Rate |
ConocoPhillips | 105.42B | 9.6 | (1.8) | |
Eni SpA | 82.19B | 7.79 | 2.4 | |
Plains All American Pipeline, LP | 8.74B | 17.04 | 2.6 | |
Enbridge Energy Partners, LP | 7.98B | 19.96 | 2.8 | |
TOTAL SA | 123.07B | 7.95 | 2.8 | |
Statoil ASA | 82.71B | 9.52 | 3.0 | |
Canadian Natural Resource | 50.39B | 12.83 | 3.5 | |
Noble Corporation | 11.00B | 11.5 | 3.7 | |
Talisman Energy Inc. (USA) | 23.86B | 17.48 | 4.3 | |
BP plc | 135.50B | 6.87 | 4.3 | |
Magellan Midstream Partners, LP | 6.55B | 17.11 | 4.4 | |
Apache Corporation | 43.55B | 9.72 | 4.7 | |
Pioneer Natural Resources | 11.15B | 20.85 | 5.6 | |
Valero Energy Corporation | 15.61B | 8.78 | 5.7 | |
ENSCO PLC | 7.79B | 11.06 | 6.6 | |
Massey Energy Company | 6.48B | 11.97 | 6.7 | |
Buckeye Partners, LP | 5.07B | 16.82 | 7.4 | |
PetroChina Company Limited | 243.97B | 9.92 | 7.9 | |
Hess Corp. | 27.11B | 10.35 | 8.0 | |
Chevron Corporation | 199.76B | 8.62 | 8.2 | |
Marathon Oil Corporation | 35.07B | 8.97 | 8.3 | |
Diamond Offshore Drilling, Inc. | 9.87B | 13.35 | 8.6 | |
Occidental Petroleum | 77.98B | 11.23 | 8.6 | |
Enbridge Inc. (USA) | 22.58B | 19.28 | 8.6 | |
EOG Resources, Inc. | 27.81B | 18.49 | 8.7 | |
Anadarko Petroleum | 36.89B | 22.57 | 8.7 | |
Exxon Mobil Corporation | 393.27B | 10.05 | 9.3 | |
Noble Energy, Inc. | 15.90B | 15.12 | 9.5 | |
Chesapeake Energy Corporation | 22.79B | 11.22 | 9.9 | |
Murphy Oil Corporation | 13.45B | 10.09 | 10.2 | |
Helmerich & Payne, Inc. | 6.44B | 14.36 | 10.3 | |
National-Oilwell Varco, Inc. | 32.70B | 15.03 | 10.7 | |
Sunoco, Inc. | 5.13B | 17.33 | 12.0 | |
EQT Corporation | 6.80B | 19.25 | 12.3 | |
Nexen Inc. (USA) | 13.14B | 8.96 | 12.8 | |
Devon Energy Corporation | 36.57B | 11.7 | 12.9 | |
EnCana Corporation (USA) | 24.39B | 29.87 | 13.9 | |
Williams Companies, Inc. | 17.38B | 18.62 | 14.2 | |
Walter Energy, Inc. | 6.06B | 8.91 | 14.4 | |
China Petroleum & Chemical | 84.66B | 6.77 | 15.7 | |
CONSOL Energy Inc. | 12.08B | 11.56 | 16.1 | |
Halliburton Company | 40.07B | 12.99 | 16.2 | |
Schlumberger Limited. | 113.10B | 17.04 | 16.7 | |
CNOOC Limited | 97.35B | 9.49 | 17.3 | |
Imperial Oil Limited (USA) | 44.00B | 17.43 | 17.6 | |
Peabody Energy Corporation | 18.89B | 10.58 | 17.6 | |
Range Resources Corp. | 8.52B | 35.4 | 18.2 | |
Cimarex Energy Co. | 8.91B | 13.08 | 19.8 | |
Baker Hughes Incorporated | 29.28B | 14.82 | 20.9 | |
Suncor Energy Inc. (USA) | 68.78B | 14.86 | 21.5 | |
Arch Coal, Inc. | 5.55B | 8.45 | 46.9 |
Bill Miller is a contrarian investor who is invested in ConocoPhilips. Warren Buffett also has COP in his portfolio but he isn't very enthusiastic about it. One of the stocks hedge funds are extremely bullish about is SLB. Stephen Mandel's Lone Pine Capital bought Schlumberger in the most recent fourth quarter and made more than 14% from his nearly $600 million bet. T. Boone Pickens also has SLB in his portfolio.
Williams Co (WMB) is one of Steven Cohen’s favorite stocks in 2011. There are 74 other hedge fund managers, including Daniel Loeb, who agree with Steven Cohen. They spent $1 billion during the fourth quarter to buy WMB shares. Now, hedge funds own 14% of outstanding shares.
Finally another out of favor energy stock that hedge funds heavily invested during the past few months is BP. T. Boone Pickens, John Griffin, Passport Capital's John Burbank, star hedge fund manager David Einhorn, and Whitney Tilson are among the hedge fund managers who are extremely bullish about BP.
Disclosure: I am long CHK.
