Key Takeaways
- A $2 billion fund’s latest 13F shows its three biggest new or added positions in Q3 were all energy stocks: ONEOK, Solaris Energy Infrastructure, and Kodiak Gas Services.
- ONEOK’s business is in the best shape of the three, but analysts see little upside left in the stock.
- Analysts see far more upside in Solaris and Kodiak, which both trade well below their consensus price targets.
- Solaris looks like the best buy of the three today, with long-term power contracts behind its analysts’ targets.
Hedge funds have until Nov. 16 to file what they owned at the end of September, and one $2 billion fund recently added new stakes in the energy sector.
Cushing Asset Management, which operates its business as NXG Investment Management, filed its 13F for the quarter ended Sept. 30 on Oct. 26.
It shows $2.18 billion of US stocks in 73 positions, and its three biggest new or added stakes were ONEOK (OKE), Solaris Energy Infrastructure (SEI), and Kodiak Gas Services (KGS).
ONEOK keeps raising its guidance
ONEOK was newly added to the fund in Q3: 959,900 shares worth $82 million by Sept. 30, 3.8% of its 13F holdings, and its eighth-biggest position. The stock is up 14% since the quarter ended.
On Oct. 27, it reported Q3 adjusted EBITDA of $2.24 billion, up 6% from a year earlier, and raised its 2026 adjusted EBITDA guidance to $8.5-$8.6 billion, its third raise this year.
It also retired nearly $5.5 billion of debt in September and won upgrades to BBB+ from S&P and Fitch.
CEO Pierce Norton said the company won’t offer 2027 guidance until February, but added, “I really like where 2027 is setting up for us.”
He pointed to the Permian Basin assets ONEOK bought from Brazos Midstream in October and to its growth projects.
But the stock has nearly caught up with Wall Street. Analysts’ consensus price target for ONEOK rose from $90 to $102 over the past year:
Against the $97.07 close, that leaves 5% upside, and the lowest target, $93, sits just below the price.
TIKR tracks 22 analysts on ONEOK. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on ONEOK, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See ONEOK’s Analyst Ratings
Solaris has contracts to grow into
The fund leaned in even harder on Solaris. It added 146% to its shares in Q3, to 1.03 million shares worth $73 million by Sept. 30, or 3.4% of its 13F stocks and its 10th-biggest position. The stock is down less than 1% since then.
Solaris has signed three long-term power contracts with investment-grade technology customers, for about 2.3 gigawatts of generation. The newest, signed in April, supports a customer’s data centers starting in late 2026 and scales up through 2028.
In Q2, revenue rose 12% from Q1 to about $219 million, adjusted EBITDA jumped 30% to about $108 million, and Solaris raised its guidance.
Analysts have grown far more bullish as those contracts came in. Their consensus target for Solaris rose from $57 to $103 over the past year:
That’s 46% above the $70.70 close, and even the lowest target, $72, is above it.
The catch is the price: about 28x forward earnings, for a company that still has to build and switch on the plants those contracts call for.
The market and the analysts disagree on Kodiak
The fund also more than doubled its Kodiak stake, adding 143% to 728,000 shares worth $39 million by Sept. 30. That’s 1.8% of its 13F stocks and its 17th-biggest position.
The stock is down 12% since the quarter ended, and 40% below its 52-week high.
Analysts have a consensus target price for Kodiak of $79.50, up from $44 a year ago and not far off its June peak of $84.07:
Against the $46.86 close, that’s 70% upside, and the lowest target, $65, is still well above the price. The stock trades at about 17x forward earnings.
The generous reading is that the selloff went too far. The less generous one is that the market is pricing in a problem the analysts’ targets don’t show yet.
I’d want to hear Kodiak’s next report, due around the second week of November, before following the fund in.
Solaris is the one I’d follow
If I could only buy one of the three right now, it’d be Solaris.
Its long-term contracts give me more confidence in its analysts’ targets than I have in Kodiak’s, and it has far more room to run than ONEOK.
Solaris reports in early November, and any slip in when its new plants come online would change my mind.
The fund’s next 13F, due in mid-February, will show whether it kept adding.
So what is ONEOK stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
