2. Antero Midstream Corporation (NYSE:AM)
Number of Hedge Fund Holders: 16
Percentage Decrease in Stake in Q4: 100%
Antero Midstream Corporation (NYSE:AM) is a midstream energy company that owns, manages, and develops assets to support Antero Resources’ production and completion activities. On April 13, Antero Midstream Corporation (NYSE:AM) declared a quarterly dividend of $0.225 per share, in line with the previous.
Antero Midstream Corporation (NYSE:AM) was downgraded from ‘Equal-Weight’ to ‘Underweight’ by Barclays analyst Marc Solecitto on March 2, with a price objective of $10, down from $11. The analyst expected little upside potential in 2022, with the company in maintenance mode and rapid investment returns unlikely until 2024.
During the fourth quarter of 2021, Mitch Cantor sold off his stake in Antero Midstream Corporation (NYSE:AM), which had featured in the fund’s portfolio since the first quarter of 2019. Mitch Cantor had been selling the stock since the third quarter of 2020.
Overall, hedge funds are loading up on Antero Midstream Corporation (NYSE:AM), as 16 of the funds tracked by Insider Monkey held stakes in Antero Midstream Corporation (NYSE:AM) at the end of Q4, up from 14 funds a quarter earlier. Richard Schimel and Lawrence Sapanski’s Cinctive Capital Management is the most significant stakeholder of Antero Midstream Corporation (NYSE:AM) among that group, with 3.13 million shares valued at $30.28 million.
Bonhoeffer Capital Management, an asset management firm, highlighted a few stocks in its Q4 2020 investor letter, and Antero Midstream Corporation (NYSE:AM) was one of them. Here is what the fund said:
“Public LBOs (32% of Portfolio; Quarterly Average Performance +25%)
This includes our broadcast
TV franchises, leasing and roll-on/roll-off (RORO) shipping, and our natural gas pipeline firm. One trend in these levered firms is the increasing spread between bond yields and the firms’ free cash flow yield.
An example is Antero Midstream Corporation (NYSE:AM), whose FCF yield was 15% as of December 31, 2020, with a debt yield of 6% with the bond/equity FCF spread of 9%. This is a large spread given that Antero Midstream Corporation (NYSE:AM) has completed its backbone infrastructure and gathering investment and capital expenditures should be small going forward. With natural gas prices rebounding, Antero Midstream Corporation (NYSE:AM) cash flows become more secured as Antero Midstream Corporation (NYSE:AM) has more cash flow cushion in making payments to Antero Midstream. The recovery in natural gas prices is expected to continue as the economy opens up and low oil prices have shut down Permian oil wells that were generating almost-free associated natural gas. Antero Midstream’s FCF yield of 15% is also higher than similarly secured Antero Midstream Corporation (NYSE:AM) subordinated debt with a yield of 7.8%.”
