We recently published a list of im Cramer is Talking About These 10 Stocks. In this article, we are going to take a look at where Energy Transfer LP (NYSE:ET) stands against other stocks that Jim Cramer is talking about.
Jim Cramer in a latest program on CNBC discussed the reasons behind the recent market declines after the ISM Services Index data. Cramer said many are still expecting more rate cuts from the Federal Reserve soon but they are wrong.
“This survey showed surprising strength, so much strength that it makes you think that the FED might not give us more rate cuts anytime soon. Right now, a ton of investors believe that the FED needs to push through a bunch of rate cuts in order to revive the economy. Lots of those bulls are counting on those cuts. That seems wrong today. They were rocked to the core because not only have they been wrong, but they’re starting to question the FED’s credibility. They know nothing,” Cramer said.
Cramer said he was “mystified” by the Fed’s rate cuts amid strong economic data.
“These traders are wondering why the heck the FED cut short rates by 50 basis points September then give another 25 in November another 25 in December what the heck did they see that made them so aggressive judging by the data. Nothing. The credibility issue, if you claim you’re data dependent, and the data is strong then why the heck are you cutting so aggressively.”
Cramer at the time said the latest nonfarm payrolls report would be one of the most important indicators of the economy and it would set the “dialog” in the coming days. Sure it will. The latest jobs data showed unemployment fell and job additions crushed Wall Street expectations. Many now believe the Fed is set to put brakes on rate cuts.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article, we picked 10 stocks Cramer recently talked about. With each company, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Energy Transfer LP (NYSE:ET)
Number of Hedge Fund Investors: 29
Answering a question about Energy Transfer LP (NYSE:ET), Jim Cramer said:
“I want you to keep owning it. It’s got a 7% yield, and if it goes down, just buy more. I like Energy Transfer. I used to dislike it, but I’ve liked it now for the last five points.”
Energy Transfer LP (NYSE:ET) is among the largest midstream companies in the world, with over 130,000 miles of pipelines and nearly 900,000 barrels per day in natural gas liquids (NGL) gathering capacity. The company makes about 90% of its EBITDA from fees, which makes it less cyclical compared to upstream energy companies that produce oil and gas. The company can benefit in the coming days amid an expected end to the pause on pending and future export permits for new liquefied natural gas projects. Energy Transfer’s $13 billion LNG-export facility in Louisiana is one of the projects impacted by this pause.
Then there’s AI. Energy Transfer LP (NYSE:ET) is expected to be one of the biggest beneficiaries of the AI-based data center boom.
The company talked about this opportunity in Q3 earnings call:
“Given Energy Transfer’s extensive interstate and intrastate natural gas pipeline footprint, we are the best positioned to capitalize on the anticipated rise in natural gas demand for AI data centers, natural gas power plants and industrial and onshore manufacturing for decades to come. We have never seen this level of activity from a demand pull standpoint and these opportunities are truly spread across our natural gas footprint from Arizona to Florida and from Texas to Michigan.
We currently serve gas-fired power plants in 15 states with approximately 185 plants served via direct or indirect connections throughout these states, and our opportunities have only increased since our last call. We have had requests to connect to approximately 45 power plants that we do not currently serve in 11 states that in aggregate could consume gas loads up to 6 Bcf per day. In addition, we have had requests from over 40 prospective data centers in 10 states. These data centers in aggregate could consume gas loads up to 10 Bcf per day. Some of these may be behind the electric meter for reliability purposes.” [read the full transcript]
Overall, ET ranks 10th on our list of stocks that Jim Cramer is talking about. While we acknowledge the potential of ET, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ET but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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