Markets

Insider Trading

Hedge Funds

Retirement

Opinion

Is Targa Resources Corp (NYSE:TRGP) the Best Natural Gas Stock to Buy Now?

We recently published a list of 9 Best AI Energy Infrastructure Stocks to Buy NowSince Targa Resources Corp (NYSE:TRGP) ranks 7th on the list, it deserves a deeper look.

Rob Thummel, senior portfolio manager at Tortoise Capital Advisors, while talking to CNBC in a latest program, said that he sees a big opportunity for AI in the energy industry. Thummel said that while everybody keeps talking about technology infrastructure when it comes to AI, they “forget” about energy infrastructure.

Thummel said that AI will create electricity demand that will in turn fuel the need for natural gas.

“There is no AI without EI (energy infrastructure) because you need this critical infrastructure to provide the fuel to keep their lights on and electricity flowing 24 hours a day.”

Talking about energy stocks, Thummel said a lot of them are “pretty simple stories” as they generate a lot of cash flows and return a significant portion of it back to shareholders.

Asked about the cyclical nature of the industry, Thummel said that global energy demand is currently at its peak and has grown for 38 years over the last four decades. The analyst said the demand for energy increases every year across the world. Thummel said the US has become the largest energy exporter and he does not see that changing for a long time.

Thummel also shared some of his top picks in the energy sector. For this article we scanned his portfolio and chose his top AI energy infrastructure picks. With each stock we have mentioned the total 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).

Suwin/Shutterstock.com

Targa Resources Corp (NYSE:TRGP)

Number of Hedge Fund Investors: 38

Texas-based midstream energy infrastructure corporation Targa Resources Corp (NYSE:TRGP) is one of the top AI energy infrastructure stock picks of Tortoise Capital Advisors. The company is one of the largest infrastructure companies delivering natural gas and natural gas liquids in the US.

Last month, Argus started covering the stock with a Buy rating and $140 price target. Targa Resources Corp (NYSE:TRGP) has strong project backlog and plans to buy back shares. Argus analyst John Staszak expects the company’s EBITDA will exceed management’s $3.7B-$3.9B guidance, driven by strong production in the Permian Basin.

The analyst said many of Targa Resources Corp (NYSE:TRGP) assets are focused on some of the most productive U.S. oil and gas formations and connected with important natural gas liquids facilities.

Targa Resources Corp (NYSE:TRGP) is a key player in the energy transportation industry which is expected to grow at a CAGR of about 5.9% through 2030, according to a report by Research and Markets.

During the last quarter of 2023, Targa Resources Corp (NYSE:TRGP) adjusted EBITDA jumped 14% to $959.9 million. In the Permian, natural gas throughput climbed 11% to 5.3 Bcf/d, and NGL throughput jumped 15% to 708.9 MBbl/d. The company generated about $709.7 million in distributable cash flow for the quarter and $2.62 billion for the year. Free cash flow was $73.7 million for the quarter and $392.7 million for the year.

Wall Street expects Targa Resources Corp (NYSE:TRGP) revenue to grow by 14% next year, while earnings are expected to rise 44% next year and 36% over the next five years on a per-annum basis. Based on these growth estimates, the stock’s forward P/E 26.5 isn’t outlandishly high.

Overall, Targa Resources Corp (NYSE:TRGP) ranks 7th on Insider Monkey’s list titled 9 Best AI Energy Infrastructure Stocks to Buy Now. While we acknowledge the potential of Targa Resources Corp (NYSE:TRGP), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TRGP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

The best part? You can discover everything about this company and its groundbreaking technology right now.

I’ve compiled everything you need to know about this groundbreaking company in a detailed, members-only report.

Trust me — you’ll want to read this report before putting another dollar into any tech stock.

For a ridiculously low price of just $9.99 a month, you can unlock a year’s worth of in-depth investment research and exclusive insights – that’s less than a single fast food meal!

Here’s why this is a deal you can’t afford to pass up:

• Access to our Detailed Report on this Game-Changing AI Stock: Our in-depth report dives deep into our #1 AI stock’s groundbreaking technology and massive growth potential.

• 11 New Issues of Our Premium Readership Newsletter: You will also receive 11 new issues and at least one new stock pick per month from our monthly newsletter’s portfolio over the next 12 months. These stocks are handpicked by our research director, Dr. Inan Dogan.

• One free upcoming issue of our 70+ page Quarterly Newsletter: A value of $149

• Bonus Reports: Premium access to members-only fund manager video interviews

• Ad-Free Browsing: Enjoy a year of investment research free from distracting banner and pop-up ads, allowing you to focus on uncovering the next big opportunity.

• 30-Day Money-Back Guarantee:  If you’re not absolutely satisfied with our service, we’ll provide a full refund within 30 days, no questions asked.

If you’re thinking about getting in, don’t wait – because once Wall Street catches wind of this story, the easy money will be gone.

Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.

Here’s what to do next:

1. Head over to our website and subscribe to our Premium Readership Newsletter for just $9.99 a month.

2. Enjoy a year of ad-free browsing, exclusive access to our in-depth report on the revolutionary AI company, and the upcoming issues of our Premium Readership Newsletter over the next 12 months.

3. Sit back, relax, and know that you’re backed by our ironclad 30-day money-back guarantee.

Don’t miss out on this incredible opportunity! Subscribe now and take control of your AI investment future!

No worries about auto-renewals! Our 30-Day Money-Back Guarantee applies whether you’re joining us for the first time or renewing your subscription a month later!