The hedge fund veteran that scored big on GME is now in energy stocks
What's happening
Crude stocks might not be ESG-friendly, but they could still be profitable. The valuation of oil and gas industry has been suppressed due to ethically-minded investors favoring renewable energy stocks, according to the hedge fund manager who made $700mn betting on meme stock $GameStop(GME.US$.
Richard Mashaal, co-chief investment officer at New York-based Senvest Management, who ranked him among the best-performing hedge funds in the world in 2021 with 86% gain, said he now has a quarter of his portfolio in fossil fuel stocks.
What's driving it.
Richard believes the traditional energy sector still awaits sizable funding to correct years of under-investment, which results in a potential valuation correction and, therefore, the investment return.
The result of the ESG movement is that there's been massive multiple compression [in oil and gas stocks] and we still haven't come back from that. Now there are other countervailing interests, such as the security of energy supply, that have come to the fore and which are not going to go [away] anytime soon.
You've got a couple of years before a meaningful production response can be mounted to satisfy demand. There's a very solid outlook [for oil and gas stocks] for another year or two.
said Richard Mashaal of Senvest Management
You've got a couple of years before a meaningful production response can be mounted to satisfy demand. There's a very solid outlook [for oil and gas stocks] for another year or two.
said Richard Mashaal of Senvest Management
Analyst Opinion
Richard is not alone on energy stocks.
Berkshire Hathaway Chairman and CEO Warren Buffett has added new shares in E&P companies $Occidental Petroleum(OXY.US$ and $Chevron(CVX.US$ despite both currently trading at multi-year highs.
OXY CEO Vicki Hollub bought a decent amount of the company's shares on the open market, even as shares trade near three-year highs.
Raymond James analyst John Freeman recently raised his OXY price target to $85 from $60, setting a new Wall Street high. That's good for nearly 50% upside.
Source: FT
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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