The Insiders Fund, LP on Energy Transfer LP
Thesis
The Insiders Fund views Energy Transfer as essential energy infrastructure that transports natural gas and other hydrocarbons through an extensive pipeline network. The manager highlights inflation-protected contracted cash flows, an approximately 6.4% distribution yield and a 10-year dividend growth record. Demand for natural gas from power-hungry data centers provides an emerging growth avenue, illustrated by a Cloudburst contract and numerous prospective customer connections. Disruption of Middle Eastern LNG supplies could further increase opportunities, while large insider purchases support the manager’s bullish outlook.
“Energy Transfer is a tollbooth on the energy highway—mission-critical pipelines moving natural gas to power-hungry regions.”
Key risks
- The stock has lagged despite improving business fundamentals
- Geopolitical developments may change the anticipated LNG supply opportunity
- Growth tied to data-center natural-gas demand requires customer connections to convert into business