Billionaire Bruce Berkowitz’s 6 Stock Picks with Highest Upside Potential

3. Enterprise Products Partners L.P. (NYSE:EPD)

Fairholme Capital Management’s Stake: $170,877,504

Number of Hedge Fund Holders: 29

Average Upside Potential: 23.46%

Enterprise Products Partners L.P. (NYSE:EPD) is one of the largest midstream energy services providers in the United States. It provides energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products. Midstream companies like EPD help move oil and natural gas around from the places where it is drilled to the places where it is processed and/or consumed.

In a market largely impacted by tariffs and other macroeconomic uncertainty, EPD remains an exception, considering that it generates its revenue by charging upstream extraction companies and downstream refining companies what are known as “tolls” to use its pipes. This business model makes it well-insulated from tariffs, inflation, and other macro headwinds largely because fluctuating gas prices don’t affect it.

Several analysts are bullish on Enterprise Products Partners L.P. owing to its strong fundamentals, attractive valuation, and future growth. In particular, its toll-taking business and insulation from macroeconomic headwinds make it particularly attractive. On May 1, Jean Ann Salisbury from Bank of America Securities maintained a “Buy” rating on the stock with a price target of $38.00. Salisbury has a buy rating on the stock despite the company slightly missing its first-quarter earnings on the back of its strong future potential.

While first-quarter earnings were a miss due to lower marketing margins and chemical outputs, the firm noted that the company’s backlog remains stable and that it has also reiterated its commitment to a stock buyback by 2026. The strategy will be supported by the company’s capital expenditure plans, which imply that a significant portion of free cash flow will be directed towards buybacks. Enterprise also enjoys several advantages, such as its brownfield cost advantages and robust export contracts. It also has a competitive edge in expanding its LPG export capacity at a lower cost compared to greenfield projects. The company also sports a stable revenue stream on the back of its take-or-pay contracts, which make up a significant portion of its exports. Together with a strong dividend yield, Enterprise seems to be a company defensively positioned in an uncertain macro environment.