In this article, we will discuss the top 10 stock picks of Henry Breck’s Heronetta Management.
Henry R. Breck is the Managing Partner and Chief Investment Officer at Heronetta Management and a former CIA employee. He has also served in the United States Air Force and is currently a member of the Council on Foreign Relations. He completed his B.A from Harvard University and received his M.A in Jurisprudence from Oxford.
Henry Breck has vast experience in investment banking and started his career in 1968 at Lehman Brothers. He was made partner at the firm four years later in 1972 and was made Chairman of Lehman Management Company. Before becoming the Managing Partner at Heronetta Management, he served as the Chairman of Ark Asset Management Co. from 1989 to 2008.
Heronetta Management is a hedge fund based in New York with 29 clients. The fund has $208.54 million in assets under management. As of the third quarter of 2021, Enterprise Products Partners L.P. (NYSE:EPD) is the firm’s largest holding with 778,480 shares worth $16.846 million. Most of Heronatta Management’s portfolio revolves around energy and petroleum companies.
Canadian National Railway Company (NYSE:CNI), The Williams Companies, Inc. (NYSE:WMB) and Energy Transfer LP (NYSE:ET) are some of the big names that are a part of Heronetta Management’s portfolio.
Source:unsplash
Top 10 Stock Picks of Henry Breck’s Heronetta Management
10. TC Energy Corporation (NYSE:TRP)
Heronetta Management’s Stake Value: $6.37 million
Percentage of Heronetta Management’s 13F Portfolio: 4.91%
Number of Hedge Fund Holders: 22
TC Energy Corporation (NYSE:TRP) is a Canada-based energy company that develops most of the energy infrastructure around North America. The business of the company revolves around liquids and natural gas pipelines along with energy.
According to Heronetta Management’s filings, the fund has 105,550 shares worth $6.37 million, representing 4.98% of the fund’s portfolio.
TC Energy Corporation (NYSE:TRP) is one of the significant names in Heronetta Management’s fund portfolio along with Canadian National Railway Company (NYSE:CNI), The Williams Companies, Inc. (NYSE:WMB) and Energy Transfer LP (NYSE:ET).
9. Pembina Pipeline Corporation (NYSE:PBA)
Heronetta Management’s Stake Value: $6.46 million
Percentage of Heronetta Management’s 13F Portfolio: 4.98%
Number of Hedge Fund Holders: 15
Pembina Pipeline Corporation (NYSE:PBA) is a transportation and storage infrastructure company that delivers natural gas and oil around the Western Provinces of Canada. The company converted from a trust to corporation in 2010.
Pembina Pipeline Corporation’s (NYSE:PBA) largest stake is owned by Heronetta Management, followed by Arrowstreet Capital which increased its activity in the company by 897% in the third quarter of 2021.
Pembina Pipeline Corporation (NYSE:PBA) is one of Heronetta Management’s top picks along with Canadian National Railway Company (NYSE:CNI), The Williams Companies, Inc. (NYSE:WMB), and Energy Transfer LP (NYSE:ET).
8. Canadian Pacific Railway Limited (NYSE:CP)
Heronetta Management’s Stake Value: $7.196 million
Percentage of Heronetta Management’s 13F Portfolio: 5.54%
Number of Hedge Fund Holders: 25
Canadian Pacific Railway Limited (NYSE:CP) is a Canadian Class I railway that owns 12,500 miles of tracks in Canada and the conterminous United States. Its famous subsidiaries include Canadian Pacific Railway, TTX Company, Eastern Railroad and St. Lawrence and Hudson Railway.
On 1st November, Emissions Reduction Alberta announced a $15 million grant with which Canadian Pacific Railway Limited (NYSE:CP) will expand the scope of its Hydrogen Locomotive Program. With this grant, the company is looking to install hydrogen production and fueling facilities at CP rail yards in Calgary and Edmonton.
Canadian Pacific Railway Limited (NYSE:CP) made its way on Heronetta Management’s top picks with Canadian National Railway Company (NYSE:CNI), The Williams Companies, Inc. (NYSE:WMB), and Energy Transfer LP (NYSE:ET).
ClearBridge Investments mentioned Canadian Pacific Railway Limited (NYSE:CP) in its investor’s letter published in the first quarter of 2021. Here is what it said:
“We reoriented the portfolio for a more cyclical market in the fourth quarter and saw good performance in these areas from structural growth companies like Canadian Pacific Railway, which we repurchased during the quarter. After announcing the acquisition of Kansas City Southern, Canadian Pacific pared gains that will create the first rail operator connecting the U.S., Mexico, and Canada.”
7. Canadian National Railway Company (NYSE:CNI)
Heronetta Management’s Stake Value: $7.48 million
Percentage of Heronetta Management’s 13F Portfolio: 5.76%
Number of Hedge Fund Holders: 40
Canadian National Railway Company (NYSE:CNI) is a Canadian Class I freight railway with a 20,400-mile network spanning from Canada to the USA. According to its recent filings, Heronetta Management owns 51,000 shares of the company worth $7.48 million.
On 27th October, CIBC analyst Kevin Chiang downgraded Canadian National Railway Company (NYSE:CNI) from Outperform to Neutral while the price target remained the same at $170. The price target was increased from $160 to $170 just two days before the downgrade by BMO Capital analyst Fadi Chamoun.
Canadian National Railway Company (NYSE:CNI) is one of the biggest names besides The Williams Companies, Inc. (NYSE:WMB), and Energy Transfer LP (NYSE:ET) in Heronetta Management’s portfolio.
6. Enbridge Inc. (NYSE:ENB)
Heronetta Management’s Stake Value: $7.68 million
Percentage of Heronetta Management’s 13F Portfolio: 5.92%
Number of Hedge Fund Holders: 19
Enbridge Inc. (NYSE:ENB) is a multinational pipeline company that operates Canada’s most extensive natural gas distribution system. The company owns crude oil and natural gas pipelines throughout Canada and the USA. About 20% of the natural gas consumed in the United States is transported by Enbridge Inc. (NYSE:ENB).
Apart from fossil fuels, Enbridge Inc. (NYSE:ENB) has started several projects consisting of renewable energy across Europe and North America. By 2050, Enbridge Inc. (NYSE:ENB) proposes to have zero greenhouse gas emissions.
On 8th November, RBC Capital analyst Robert Kwan kept an Outperform rating on the Enbridge Inc. (NYSE:ENB)’s shares and raised the price target from $57 to $61.
ClearBridge Investments mentioned Enbridge Inc. (NYSE:ENB) in the “Global Infrastructure Value Strategy” second quarter 2021 investor letter. Here is what the firm said:
“On a regional basis, the U.S. and Canada was the top contributor to quarterly performance, of which Canadian energy infrastructure company Enbridge was one of the lead performers. Enbridge owns and operates one of the largest oil and gas pipeline networks in North America. The company also owns regulated gas distribution utilities in Ontario, Canada. Enbridge’s Line 3 Replacement Project received a favorable court ruling regarding the adequacy of its Environmental Impact Statement. This significantly lowers the execution risk for the project and enables the company to place the project into service later in the year.”
5. The Williams Companies, Inc. (NYSE:WMB)
Heronetta Management’s Stake Value: $7.83 million
Percentage of Heronetta Management’s 13F Portfolio: 6.03%
Number of Hedge Fund Holders: 39
The Williams Companies, Inc. (NYSE:WMB) is an American energy company founded in 1908 as Williams Brothers. It is a Fortune 500 company whose primary business is natural gas processing. The Williams Companies, Inc. (NYSE:WMB) also owns petroleum and electricity generation plants.
The EPS for the third quarter of 2021 for The Williams Companies, Inc. (NYSE:WMB) was recorded at $0.34 compared to $0.27 estimates. Moreover, the company also beat the revenue estimates by $387.28 million after generating $2.48 billion.
As of the third quarter of 2021, Heronetta Management owned 301,865 shares of The Williams Companies, Inc. (NYSE:WMB) worth $7.83 million. Southeastern Asset Management holds the most significant stake in the company, with 7.8 million shares worth $202.59 million.
Longleaf Partners Fund’s investor letter for the second quarter of 2021 mentioned The Williams Companies, Inc. (NYSE:WMB). Here is what it said:
“Williams (14%, 0.51%), the natural gas pipeline operator, was also a positive contributor. The value grew slowly but steadily thanks to continued cash flow growth at Williams’s main Transco pipeline, as well as good volume trends (up 11% YOY) in its Northeast assets. The stock traded up with gas price strength as the quarter went on. We believe that management is open to more transactions to grow and simplify value per share, and as industry conditions improve, this becomes more likely.”
4. Energy Transfer LP (NYSE:ET)
Heronetta Management’s Stake Value: $9.3 million
Percentage of Heronetta Management’s 13F Portfolio: 7.19%
Number of Hedge Fund Holders: 29
Energy Transfer LP (NYSE:ET) is one of America’s largest energy companies with a diverse portfolio that includes transportation and storage of crude oil, natural gas liquids, and LNG. The current market cap of the company is $25.09 billion.
The third quarter of 2021 proved to be quite favorable for Energy Transfer LP (NYSE:ET). In the third quarter of 2021, the company generated $16.66 billion in revenue, beating the revenue estimates by $1.65 billion compared to $178.09 million in the previous quarter. However, the EPS for the same quarter for Energy Transfer LP (NYSE:ET) was $0.20 compared to $0.29 analyst estimates.
In the past year, Energy Transfer LP (NYSE:ET) went up by 69.94%. However, the most considerable feat achieved by the company during this year was $6 billion in debt reduction.
Miller Value Partners mentioned Energy Transfer LP (NYSE:ET) in its second-quarter 2021 investor letter. The contents of the letter can be read here:
“Energy Transfer LP (ET) rose over the period along with the price of oil climbing 40.59% over the period. The company received positive news that the Dakota Access Pipeline project would not be shut down while the Environmental Impact Statement by the US Army Core of Engineers is drawn up. Energy Transfer reported strong 1Q results with revenue of $17B surpassing expectations for $11.8B with adjusted earnings before income, taxes, depreciation and amortization (EBITDA) hitting $5.04B ahead of consensus of $2.77B. The company raised full year adjusted EBITDA guidance to $12.9-13.3B from $10.6-11.0B previously, with the increase largely related to the benefits realized from Winter Storm Uri. The company paid down $3.7B in debt during the quarter, using strong cash flow to reduce leverage. The company also announced the issuance of $900M in 6.5% Series H perpetual preferreds with the company using the proceeds to repay debt and for general purposes.”
3. Magellan Midstream Partners, L.P. (NYSE:MMP)
Heronetta Management’s Stake Value: $10.16 million
Percentage of Heronetta Management’s 13F Portfolio: 7.82%
Number of Hedge Fund Holders: 13
Magellan Midstream Partners, L.P. (NYSE:MMP) is an American petroleum and crude oil transportation, storage, and distribution company. The company was formerly a part of The Williams Companies, Inc. (NYSE:WMB) till 2003.
According to the recent filings, Heronetta Management owns 222,898 shares of Magellan Midstream Partners, L.P. (NYSE:MMP), worth $10.16 million, comprising 7.82% of the fund’s portfolio. The number of hedge funds investing in the company decreased from 14 in the first quarter to 13 in the second quarter of 2021.
Moreover, on 11th November, the company’s price target was raised from $50 to $52 by Mizuho analyst Gabriel Moreen. However, on 15th November, Evercore ISI analyst Stephen Richardscon downgraded Magellan Midstream Partners, L.P. (NYSE:MMP) from Outperform to In-Line.
2. MPLX LP (NYSE:MPLX)
Heronetta Management’s Stake Value: $11.75 million
Percentage of Heronetta Management’s 13F Portfolio: 9.05%
Number of Hedge Fund Holders: 11
MPLX LP (NYSE:MPLX) is an MLP that operates midstream energy infrastructure and logistics. It was formed by Marathon Petroleum Corporation (NYSE:MPC) and they own the majority limited partner interest in the company.
MPLX LP (NYSE:MPLX) has beaten the estimates by a good margin in the previous four quarters. In the third quarter of 2021, the EPS for the company was $0.74 compared to $0.70 estimates. Similarly, the revenue for the same quarter was $2.56 billion compared to the $2.38 billion analyst forecast.
Out of the 873 hedge funds tracked by Insider Monkey, 11 of them held stakes worth $115.64 million in MPLX LP (NYSE:MPLX) in the second quarter of 2021. In the previous quarter, 8 hedge funds had stakes worth $136.19 million in the company.
Miller/Howard Investments mentioned MPLX LP (NYSE:MPLX) in its first quarter 2021 investor letter. Here is what the firm said:
“Lastly, we added MPLX LP (MPLX) in the with-MLP version. MLPX pays a high dividend and is cheap relative to similar pipeline companies… We increased our weight in MPLX LP (MPLX), which provides exposure to Permian volumes and northeast natural gas volumes. In addition, the company’s FCF yield was above the portfolio’s FCF yield.”
1. Enterprise Products Partners L.P. (NYSE:EPD)
Heronetta Management’s Stake Value: $16.846 million
Percentage of Heronetta Management’s 13F Portfolio: 12.98%
Number of Hedge Fund Holders: 28
Enterprise Products Partners L.P. (NYSE:EPD) is a Texas crude oil and natural gas pipeline company that ranks at no. 105 in the list of Fortune 500 companies in 2021. The company owns about 51,000 miles of pipelines and 26 natural gas processing plants.
On 19th October, Wolfe Research analyst Keith Stanley downgraded Enterprise Products Partners L.P. (NYSE:EPD) stock from Outperform to Peer Perform while mentioning that the upcoming midstream earnings season does look good but not great.
First Eagle Investment Management currently owns the largest stake in Enterprise Products Partners L.P. (NYSE:EPD), with 2.8 million shares worth $61.12 million. Meanwhile, Heronetta Management owns 778,480 shares worth $16.846 million, representing the most significant percentage in the fund’s portfolio at 12.98%.
Enterprise Products Partners L.P. (NYSE:EPD) was mentioned by ClearBridge Investments in its first quarter 2021 investor letter. Here is what the firm said:
“While reducing in health care and consumer staples, we increased our exposure to high-quality names in economically sensitive areas of the market. We added to low-cost, high-quality energy names (including) Enterprise Products Partners LP. We are positive on this company’s strong balance sheets, competitive positions, and exposure to an economic recovery.”
You can also take a peek at Top 10 Stock Picks of Brandon Osten’s Venator Capital Management and 10 Best Roth IRA Stocks To Buy According To Hedge Funds.
Follow Insider Monkey on Twitter
Suggested articles:
- 7 Oil and Gas Stocks to Buy According to Billionaire Leon Cooperman
- Top 10 Stock Picks of Anand Desai’s Darsana Capital Partners
- 10 Growth Stocks to Buy According to Jay Chen’s Himension Capital
Disclosure: None. Top 10 Stock Picks of Henry Breck’s Heronetta Management is originally published on Insider Monkey.
