Energy Transfer: Prepare To Buy (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• In my last note on Energy Transfer, I had a 'Neutral/Hold' stance, missing out on +5.83% alpha over the S&P 500. Now I am more bullish but maintain my stance:
• Crestwood is a good acquisition to bolster ET's portfolio as it solidifies the latter's existing market position and enables entry into new basins. The purchase is also not pricey.
• ET is well-set to capitalize on US NGL exports, which are expected to increase in 2024. ET is a beneficiary here as it has a 40% market share.
• Currently, ET is trading near its 5-yr median 1-yr fwd price to cash flow per unit multiple; I prefer a valuation discount to become a buyer.
• Technical analysis also suggests there may be an opportunity to accumulate at lower prices to have a better chance of maximizing total shareholder return.

Read the full article here.