The Value Stock Big-Money Managers Are Quietly Buying
Key Points
In recent quarters, major money managers like BlackRock and Vanguard have increased their positions in Chevron.
Chevron may not seem cheap compared to current results, but the integrated oil and gas company could experience a massive rebound in the event of an oil price recovery.
The company is also pursuing aggressive cost-cutting and return-of-capital efforts, alongside efforts to capitalize on the AI data center boom.
- 10 stocks we like better than Chevron ›
Oil prices have started bouncing higher,, but even before geopolitical developments resulted in a rebound, Wall Street's "smart money" apparently began increasing their positions in top oil and gas companies.
At least, that's the takeaway, based on recent money manager accumulation of shares in Chevron (NYSE: CVX) since late last year.
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Chevron has been a top oil and gas stock for years, but today it offers an interesting value proposition. While Chevron stock may not appear cheap on a screener, several factors suggest it is inexpensive relative to its future potential.
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Several big names in asset management have been buying Chevron
Based on recent SEC form 13F filings, top asset managers like BlackRock and The Vanguard Group upped their positions in Chevron during the third quarter of 2025. BlackRock has acquired an additional 20.1 million shares, while Vanguard has increased its position by 27.9 million shares.
Fayez Sarofim & Co, an asset manager with deep connections to the energy industry, increased its position by around 1.3 million shares.
As always, the rationale behind these purchases varies. Their investment objectives and strategy may differ from your own, so it's not necessarily wise to "piggyback" on their purchases. Nevertheless, there may be merit in buying Chevron right now.
Undervalued, with many catalysts in motion
Currently, Chevron trades for around 21.5 times forward earnings. Admittedly, this is a fairly high valuation for an integrated oil and gas stock. Still, it may be shortsighted to assess Chevron's valuation just on current results.
Consider that long-term earnings forecasts, which anticipate a recovery in crude oil prices, call for earnings to surge from $6.73 to $13.55 per share within two years. Chevron's newfound focus on cost reduction and cash flow growth may also help it meet this forecast.
Return-of-capital efforts, including its share repurchase program, plus its 4.1% dividend, also stand to boost long-term returns. Atop these factors, there is also an "AI angle" with Chevron. The company is investing heavily into projects to provide energy to AI data centers. This could serve as yet another catalyst for the stock.
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Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends BlackRock. The Motley Fool has a disclosure policy.
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