Is U.S. Energy Corp. (USEG) the Best Hot Oil Stock to Buy According to Hedge Funds?

U.S. Energy Corp. (USEG) has been making waves in the energy sector, with hedge funds taking notice of the company's potential. As of Q3 2024, 17 institutions hold USEG stock, with a total of 1.7 million shares owned by institutions. This growing interest from hedge funds begs the question: is USEG the best hot oil stock to buy according to hedge funds? Let's dive into the data and expert insights to find out.



Institutional Ownership and Buys vs. Sells

One of the key indicators that hedge funds use to evaluate USEG is institutional ownership and the ratio of buys to sells. As of Q3 2024, there were 17 institutions holding USEG stock, with a total of 1.7 million shares owned by institutions. This represents an increase from the previous quarter, suggesting that hedge funds are bullish on the company's prospects.



Moreover, the number of institutions holding USEG stock has been increasing, with 17 institutions holding the stock in Q3 2024 compared to 15 institutions in Q2 2024. This trend indicates that hedge funds are becoming more interested in USEG as an investment opportunity.

Average Buy Prices and Current Price

Another important metric that hedge funds consider is the average buy prices of institutions and the current price of the stock. As of Q3 2024, the average buy price for institutions holding USEG stock is around $2.50, while the current price is approximately $2.73. This suggests that many institutions are still in profit, which may indicate a lower likelihood of selling their shares in the near term.

Fund Ratings and Performance

Hedge funds also use fund ratings and performance metrics to evaluate the quality of a stock. For USEG, the average rating from analysts is "Strong Buy," indicating a positive outlook on the stock's performance. Additionally, the 12-month stock price forecast is $2.75, which is an increase of 0.73% from the latest price. This further supports the positive outlook on USEG's stock.

Financial Performance and Market Trends

When evaluating a stock, hedge funds consider the company's financial performance and market trends. In the case of USEG, the company's revenue and earnings per share (EPS) have been volatile in recent years. However, the company has shown a trend of increasing revenue and decreasing losses in the past two years.

For example, in 2023, USEG's revenue was $30.21 million, a decrease of -27.28% compared to the previous year's $41.54 million. However, losses were -$32.36 million, which is 3259.9% more than in 2022. This suggests that the company is still in a recovery phase, but its financial performance is improving.



Option Holders and Net Ownership

The option holders of USEG play a significant role in shaping the company's stock price and overall investment appeal. Their activities, such as buying and exercising call options or selling and exercising put options, can drive the stock price higher or lower, respectively, and attract or deter other investors from buying the stock.

As of Q3 2024, there are 11 institutions holding call options on USEG stock, with a total of 1.2 million shares owned by institutions. This represents an increase from the previous quarter, suggesting that option holders are bullish on the company's prospects. Conversely, there are 6 institutions holding put options on USEG stock, with a total of 0.5 million shares owned by institutions. This indicates that some option holders are more risk-averse or have identified better investment opportunities elsewhere.



Conclusion

Based on the data and expert insights, U.S. Energy Corp. (USEG) appears to be an attractive hot oil stock to buy according to hedge funds. The growing institutional ownership, increasing buys vs. sells ratio, positive fund ratings, and improving financial performance all suggest that USEG is a strong investment opportunity. Additionally, the bullish outlook from option holders further supports the positive outlook on USEG's stock. However, it is essential to consider other factors, such as the company's growth prospects, management team, and market conditions, when making investment decisions.