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Is Williams Companies (WMB) A Smart Long-Term Buy?

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Longleaf Partners Global Fund, an independent investment management firm, published its fourth quarter 2020 investor letter – a copy of which can be downloaded here. A return of 17.46% was recorded by the fund in the fourth quarter of 2020, outperforming its MSCI World benchmark that delivered a 13.96% return in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Longleaf Partners Global Fund, in their Q4 2020 investor letter, mentioned The Williams Companies, Inc. (NYSE: WMB) and emphasized their views on the company. The Williams Companies, Inc. is a Tulsa, Oklahoma-based energy company that currently has a $29.8 billion market capitalization. Since the beginning of the year, WMB delivered a 22.49% return, impressively extending its 12-month gains to 76.56%. As of March 26, 2021, the stock closed at $24.56 per share.

Here is what Longleaf Partners Global Fund has to say about The Williams Companies, Inc. in their Q4 2020 investor letter:

"Williams (1%, 1.53%; 4%, 0.18%), the natural gas pipeline company, was a strong contributor for the year. Similar to CNX, Williams was a strong absolute and relative performer in the portfolio. In the most recent quarter, EBITDA increased 4% quarter-over-quarter and year-over-year, highlighting the value of these assets and consistency of their earnings. We began buying these assets at a discount in late 2019, as the market feared negative effects from customer bankruptcies and low natural gas prices, and then we added more in a totally irrational market panic in March, before its share price stabilized and rebounded significantly this year as it became clear that these worries would not impact the business’s FCF or long-term value per share. Williams is on track to generate 2021 EBITDA growth and FCF after all capex and dividends, but the share price does not yet reflect the quality of the business or the significant future upside from today’s level."

Alaska Oil Pipeline stocks WMB KMI EPD ETP SLX ENB
Alaska Oil Pipeline stocks WMB KMI EPD ETP SLX ENB

Jonathan Nafzger / shutterstock.com

Our calculations show that The Williams Companies, Inc. (NYSE: WMB) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, The Williams Companies, Inc. was in 38 hedge fund portfolios. WMB delivered an 18.42% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.