Energy Transfer Equity (ETE) Carries Whetstone Capital to Huge Turnaround

Williams Companies Still A Good Investment

Williams Companies Inc (NYSE:WMB)‘s failed merger has prompted Whetstone Capital’s management to reduce its exposure to the stock by 18%. According to its latest 13F filing, the fund held 731,354 shares worth $15.8 million at the end of June. Despite failing to oust Williams Companies Inc (NYSE:WMB) CEO, activist Keith Meister has not given up and is still looking for ways to shake up the company’s management. His fund, Corvex Capital, has issued a letter to the company’s shareholders to nominate 10 of its employees to Williams’ board of directors, who will act as placeholders until a new slate of directors is elected. Keith Meister also confirmed the rumors that Enterprise Products Partners L.P. (NYSE:EPD) approached Williams earlier this summer, but the latter rebuffed the buyout offer. At the end of the second quarter, 22.5% of Williams Companies Inc (NYSE:WMB)’s common stock was held by 58 of the funds in our database, up from 52 at the end of the first quarter. Phill Gross and Robert Atchinson made a big bullish play on this stock, having increased their fund’s holding by 357%. According to its latest 13F filing, Adage Capital Management held 4.68 million shares valued at $101.3 million.

Bullish On Penntex Midstream Partners

David Atterbury and his team are bullish on Penntex Midstream Partners LP (NASDAQ:PTXP), one of Whetstone Capital’s top performers during the second quarter. The fund’s stake was increased by 23% to 1.19 million shares reportedly worth $18.5 million. Penntex Midstream Partners LP (NASDAQ:PTXP) has a market cap of $641 million and pays an annual dividend of $1.14 per share, providing investors with a 7.12% yield. For the most recent quarter, the company swung to a profit but failed to meet Wall Street’s expectations. The company earned $0.13 per share on the back of $19.2 million in revenue, while analysts had projected $0.14 per share on $18.2 million in revenue. Shares are currently changing hands at $15.97 per unit, up 25% year-to-date. At the end of June, Penntex Midstream Partners LP (NASDAQ:PTXP) could be found in the equity portfolios of 4 of the funds tracked by Insider Monkey, up from 3 a quarter before. Daniel S. Och‘s OZ Management was also invested in this stock, having indicated ownership of 1.8 million shares worth 28.1 million at the end of the quarter.

Top Dog

Energy Transfer Equity LP (NYSE:ETE) is Whetstone Capital’s star performer and the new top equity position. According to its recent 13F filing, the fund held 1.75 million shares valued at $25.1 million. Hedge fund sentiment towards Energy Transfer Equity LP (NYSE:ETE) was pretty much unchanged during the quarter, as the number of funds invested inched down to 30 at the end of June. Jim Simons‘s Renaissance Technologies, on the other hand, reduced its holding of the stock by 15% to 1.71 million shares valued at $24.5 million. Following the failed takeover of Williams Companies, Energy Transfer Equity LP (NYSE:ETE) decided to focus on its in-house projects, including an important pipeline from North Dakota’s Bakken Shale formation. It is expected to go online by the end of the year and the company’s management is intent on increasing its capacity to 570,000 barrels a day from 470,000 barrels a day. Analysts’ at Morgan Stanley have recently initiated coverage on the stock, assigning an ‘Overweight’ rating and a price target of $20 per share. Credit Suisse has the same price target, having reiterated its ‘Buy’ rating in the beginning of August.

Disclosure: none.