Energy Transfer (ET)
Entry range: Unlock
Price target: Unlock
It’s not just technology companies benefitting from the AI boom, energy companies of all kinds are also reaping the benefits. The AI data center boom demands 24/7 reliable power, leading utilities to turn to natural gas to supply it. New gas fired power plants are being proposed specifically for AI workloads, creating structural, not seasonal demand growth. So while natural gas demand has historically by seasonal (higher in the winter), the globe’s electrification is changing its status.
We already covered a company that focuses on producing natural gas in this watchlist, let’s turn our focus to a company that transports it. Energy Transfer is one of the largest and most diversified midstream energy companies in the North America with approximately 140,000 miles of pipelines transporting oil, natural gas, and natural gas liquids. They don’t produce it, they move it, store it, and process it for fees. The company generated $82.7 billion last year doing this, and is expected to rapidly increase revenue in the coming years as it positions itself as a major infrastructure provider for the AI boom. It already has multiple long term agreements with Oracle and another deal with CloudBurst Data Centers.
Past the AI data center demand, ET is working on key infrastructure projects like the High Brinson Pipeline Expansion, which has been described by its management as “the most profitable asset we’ve ever built”. Indeed, the company’s guidance does look rosy, making its stock’s current valuation attractive.
Trading at a price to earnings ratio of 13x, it’s cheaper than the industry average of 17.6x. And with a dividend that yields nearly 8%, this is a strong buy at this price, especially after the company recently maintained its robust long term outlook with different growth projects.
Please note that price targets are subject to change based on market developments and company updates. These stocks usually take time to come around. We'll be updating the stock as needed for our Hyper Stocks Pro members. Wanna see real-time market updates? Learn more here.
Lockheed Martin (LMT)
Entry range: Unlock
Price target: Unlock
Global defense spending is experiencing significant growth, with recent projections showing compound annual growth rates (GAGRs) ranging from 4.9% to over 8% for the mid 2020s, driven by geopolitical tensions and military modernizations. Estimates show that total spending last year was near $2.7 trillion and is projected to rise towards $6 trillion by 2035.
Whether you agree with defense spending or not, we live in a world where threats are real and defense systems must continue advancing for us to maintain our freedom. Lockheed Martin is the world’s largest defense contractor, providing the U.S. and its allies with combat aircraft like the F-35 fighter jet, missiles and precision strike weapons. Helicopters (including the infamous Black Hawk), radar systems, and space systems and satellites.
It’s safe to say that the company provides a lot of critical products and systems to the world, making them a strong name to watch as global defense spending increases in the coming decade.
Wars ending is a good thing, there’s no argument there, but even if wars ended, Lockheed Martin still has a backlog that shows a record of more than $176 billion, demonstrating strong future demand. NATO allies and the Middle East are ramping up arms purchases to upgrade their arsenal, likely to protect from further Russian advances (specifically for NATO). The company just secured the largest Patriot missile contract in history, awarded by the U.S. Army. And another $10.85B contract from the U.S. Marine Corps. This shows that they’re seeing demand on the home front and across the globe
Financials:
The stock has been relatively flat over the last three years, and rightfully so. LMT’s revenue has been flat while peers like RTX and NOC were growing sales. However LMT’s revenue has shown signs of recovery this year, with last quarter growing 8.8%. A recent guidance / outlook increase on both revenue and earnings is another promising signals.
LMT’s outlook and backlog suggest that there’s a good chance it’s about ready to breakout from its three year consolidation and finally move back into a “rally” stage. Trump’s big push on defense and the globe’s increased spending could be a catalyst for the defense sector as a whole, but LMT must continue landing big contracts and increasing revenue to maintain investor attention over its competitors.
Please note that price targets are subject to change based on market developments and company updates. These stocks usually take time to come around. We'll be updating the stock as needed for our Hyper Stocks Pro members. Wanna see real-time market updates? Learn more here.
Stock Name - Unlock
Entry range: 17.00-18.00
Price target: 20.00-21.00
Second PT: 23.00
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here to unlock more high probability set-ups!
Stock Name - Unlock
Entry range: 66.00-68.00
Price target: 76.00
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here to unlock more high probability set-ups!
Stock Name - Unlock
Entry range: 37.00-38.00
Price target: 47.00-50.00
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here to unlock more high probability set-ups!
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of capital. Always conduct your own research or consult with a licensed financial advisor before making investment decisions.