Recent institutional activity in WPZ

The number of institutional holders in Williams Partners (WPZ) increased to 349 in the second quarter compared to 342 in the previous quarter. However, the percentage of shares held by institutional investors fell to 22.8% from 23.3% during the same time period. Kayne Anderson Capital Advisors and OFI SteelPath unloaded major position in WPZ during the quarter. They sold 4.7 million and 3.7 million shares, respectively.

Are Institutional Investors Bearish on Williams Partners?

Overall, WPZ saw total buying of 11.0 million shares from institutional investors during the quarter, while 8.6 million shares were sold. Among the top institutional holders, 9.0 million positions were unloaded. That indicates a bearish sentiment in WPZ. Center Coast Capital Advisors and Balyasny Asset Management were the biggest sellers with 4.5 million and 1.4 million shares sold, respectively.

Why are institutional investors bearish on WPZ?

Institutional investors’ bearishness on WPZ could be attributed to the following factors:

  • WPZ has an expected fall in distributable cash flow by the end of 2017 due to asset sales and contract restructuring. The partnership expects its distributable cash flow to be between $2.6 billion and $2.8 billion. At the mid-point, that represents a 9.1% fall compared to 2016.
  • WPZ has seen a fall in throughput volumes in some regions due to production-related shut-ins.
  • WPZ has had distribution cuts, which is part of the partnership’s long-term strategy to strengthen its balance sheet.

Top five holders

Fidelity Management & Research, Alps Advisors, Harvest Fund Advisors, Kayne Anderson Capital Advisors, and Tortoise Capital Advisors are the top five institutional holders in WPZ. Fidelity Management & Research continues to be the top holder in the partnership despite unloading 0.93 million positions in the recent quarter. It currently holds 2.9% in WPZ.

Analyst recommendations

About 72.2% of analysts rate WPZ a “buy,” while the remaining 27.7% rate it a “hold” as of August 24, 2017. WPZ was last upgraded by Barclays and Jefferies to a “buy.” WPZ’s peer, Boardwalk Pipeline Partners (BWP) and Oneok (OKE) have “buy” ratings from 50.0% and 61.1% of analysts, respectively, surveyed by Reuters. WPZ is currently trading below the low range ($44) of analysts’ target price. Its average target price of $55 implies a ~44.0% return from its current price levels.

In the next part, we’ll look at the recent institutional activity for Energy Transfer Partners (ETP).

Latest articles

Shares of China’s leading search engine Baidu (BIDU) have been on a tear today. The stock gained 7.8% in after-hours trading today to close at $104.22.

Bernie Sanders tweeted his support for legalizing marijuana nationally and expunging past marijuana convictions. How could this impact cannabis stocks?

Today, Canopy Growth (WEED) (CGC) stock saw its lowest point in 2019. The stock opened at $28.3 but fell to $26.5 in the afternoon.

Today, Kroger (KR) and Walgreens Boots Alliance (WBA) announced the expansion of their strategic partnership. Let's look at the details.

Micron Technology (MU) started the mass production of 16Gb DDR4 products using 1z nm (nanometer) process technology. MU has returned over 37% YTD.

Chinese (FXI) tech company Baidu (BIDU) will be announcing its second-quarter earnings results on August 19 after the market closes.