We just published a list of the 10 Best Stocks To Buy According to Billionaire Armitage and Devon Energy (NYSE:DVN) ranked 7th on this list.
John Armitage has managed money since the early 1980s, and the record behind his firm is the reason investors keep an eye on his filings. He started Egerton Capital in London in 1994 with William Bollinger, after a career at Morgan Grenfell that began in 1981. There he ran a unit trust for six years that beat its index by 10% a year and ranked first among 85 funds, which gave him the confidence to go alone.
Egerton runs a concentrated, long-biased book. Its third-quarter 13F lists 23 holdings worth $9.82 billion, and the five largest account for 52.4% of that total.
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Pricing Power, Realistic Managers and Valuation Discipline
Armitage laid out his philosophy in a podcast hosted by Nicolai Tangen, who worked for him for five years before running Norges Bank Investment Management. His first question about any idea is whether it is worth the time, since many businesses are fairly priced, and the second is whether he can understand it.
He prizes pricing power, the ability to raise prices despite competition, because a company that outpaces its own cost inflation achieves structurally rising margins. He also watches incremental margins, since a high margin on extra sales can swing profit sharply when revenue beats or misses. The balance sheet gets the same attention as the income statement, from inventories to receivables.
He wants managers who admit their mistakes and distrusts those who always present a rosy picture or lean on accounting choices to look better. Valuation matters to him, perhaps too much, he admits, because it has made him miss many great growth stocks. He dismisses enterprise value to EBITDA as meaningless because depreciation is a real cost. Readers who want to compare his style with another long-horizon manager can read our ranking of the stocks favored by a different billionaire’s fund.
Recent Returns Lag the Market, but the Long Record Holds Up
He builds positions slowly, starting small and adding as conviction grows, and he usually trims after a disappointment because he prefers confirmation of a thesis to contradiction. At the firm, two people must love an idea before it becomes large, and he prefers thematic diversification to heavy concentration.
Schroders manages the Schroder GAIA Egerton Equity fund, which Egerton oversees. Its euro accumulation share class returned 19.0% in 2025, ahead of 18.4% for the MSCI World index, after gaining 20.4% in 2024 against 21.0% for the index. Through the end of September this year it returned 1.8%, while its comparator gained 12.4%. Over three years it has compounded at 15.4% annually, and since its November 2009 launch at 7.9%.
Schroders called the quarter’s stock selection poor, as a violent tech selloff, rising bond yields and a market narrowed to artificial intelligence worked against a diversified book. Armitage told Tangen he stuck to his valuation numbers rather than chase the crowd, which he called lucky.
On technology, he dislikes the market’s concentration in AI but calls it very powerful, and he wants it to help his team rather than think for them. Investors following that theme can also browse AI picks across two other billionaire portfolios.
He also cautions that concentration is marvelous when it goes right and a disaster when it goes wrong, and says he dislikes financial leverage because longs and shorts can both move against a fund at the same time.
Devon Energy is one of the 10 largest holdings in Egerton’s Q3 2026 13F, with a stake value of $498.585208 million, 10,829,392 shares and 5.08% of Egerton’s portfolio.
Armitage regards Devon Energy as a strong operator in the best oil basin in the country. The all-stock merger with Coterra closed earlier this year, and he expects the combined company to beat its $1 billion synergy target, citing a long list of cost initiatives and low well costs. He added to the position during the summer.
Part of his argument rests on assets the market overlooks. Properties outside the Delaware Basin make up roughly 40% of the company’s market value by his estimate, and a portfolio review is due. Two activist investors are involved, and he sees the balance sheet strengthening as leverage falls to a low multiple of earnings by year end, with an $8 billion buyback authorization behind it.
Oil is the risk he names. The shares, in his view, discount a $60 oil price, below the mid-cycle range management plans around. He treats the oil price as the variable that could break the thesis, which is why valuation protection matters to him.
For readers tracking the group, our roundup of energy and power stocks that draw strong reactions from Jim Cramer is a useful companion.
While we acknowledge the risk and potential of DVN as an investment, we believe certain AI infrastructure stocks offer far stronger long-term potential at a much more attractive entry point. If you are looking for an AI stock more promising than DVN that operates as a critical AI tollbooth and stands as the most important company in the world, check out our report about this must-own AI stock.
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Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
