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

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.”

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Jonathan Nafzger /

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.