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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (62916)	12/6/2019 8:15:37 PM
From: Spekulatius	Read Replies (1) of 78957

I was asked about WMB in a private message as they’re held their investor day and presented their outlook for Y2020. It would rather answer this in public: Here are my thoughts: 1) Outlook 2% EBITDA growth, 5% growth in DCF. That’s a bit less than expected, but note that they expect to invest only $1.2B next year. This will enhance their FCF and allow for further deleveraging while reading the dividend, which ai think is positive. Eventually, they will reduce leverage to < 4x EBITDA and I think they should work towards a BBB+ credit rating. They also indicated that they are open to further JV or outright sales for the G&P assets , which I think is encouraging and probably could get them to their leverage goal faster. They did not mention the impact of a pot CHK bankruptcy. It would have liked to see some numbers, but I understand that this will lead to renegotiation of their contracts potentially, so they can’t throw out numbers right now. Market had a muted reaction to above, which is understandable, but the thesis is intact, imo: 7% dividend plus mid single digit dividend growth ~ 12% expected return on investment. s24.q4cdn.com

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