Western Midstream Partners, LP (WES) Bundle
Who Invests in Western Midstream Partners, LP (WES) and Why?
Who Invests in Western Midstream Partners, LP and Why?
Key Investor Types
Investors in Western Midstream Partners, LP (WES) can be categorized into several key types:
- Retail Investors: Individual investors who purchase shares through brokerage accounts. As of September 30, 2024, retail investors held approximately 55.2% of the total common units outstanding, equating to about 214,873,849 units.
- Institutional Investors: Large organizations such as pension funds, insurance companies, and mutual funds that invest substantial amounts of capital. Institutional holdings account for a significant portion of ownership, reflecting confidence in the company's stability and growth.
- Hedge Funds: These funds actively manage portfolios to achieve high returns, often employing various strategies. They may invest in WES for potential short-term gains and to exploit market inefficiencies.
Investment Motivations
Investors are attracted to WES for several reasons:
- Growth Prospects: The company has shown a robust increase in throughput, with natural-gas throughput totaling 5,016 MMcf/d for the three months ended September 30, 2024, representing a 1% increase from the previous quarter.
- Dividends: WES has a strong dividend history, maintaining a quarterly distribution of $0.875 per unit as of the third quarter of 2024, appealing to income-focused investors.
- Market Position: As a midstream energy company, WES plays a crucial role in the energy supply chain, making it a strategic investment in the energy sector.
Investment Strategies
Different investor strategies can be observed among those investing in WES:
- Long-Term Holding: Many institutional investors adopt a buy-and-hold strategy, aiming to benefit from WES's consistent dividend payouts and long-term growth.
- Short-Term Trading: Some retail investors might engage in short-term trading based on market trends and volatility, capitalizing on price fluctuations.
- Value Investing: Investors might view WES as undervalued based on its earnings potential, with a net income of $1,269,672,000 for the nine months ended September 30, 2024, compared to $752,255,000 for the same period in 2023.
| Investor Type | Percentage of Ownership | Investment Motivation | Typical Strategy |
|---|---|---|---|
| Retail Investors | 55.2% | Dividends, Growth Prospects | Short-Term Trading |
| Institutional Investors | Approximately 44.8% | Growth, Stability | Long-Term Holding |
| Hedge Funds | Varies | Market Inefficiencies | Active Trading |
As of September 30, 2024, WES's total liabilities were reported at $9,603,707,000, with total equity amounting to $3,236,827,000. This financial structure supports investor confidence in the partnership's capacity to generate returns through both capital appreciation and income distributions.
Institutional Ownership and Major Shareholders of Western Midstream Partners, LP (WES)
Institutional Ownership and Major Shareholders
As of September 30, 2024, the top institutional investors in the company are as follows:
| Investor Name | Type | Shares Held | Percentage Ownership |
|---|---|---|---|
| Occidental Petroleum Corporation | Institutional | 165,681,578 | 42.5% |
| Public Investors | Institutional | 214,873,849 | 55.2% |
| Other Institutional Investors | Various | 10,000,000 | 2.3% |
Recent changes in ownership indicate a significant shift in the stakes held by institutional investors. In August 2024, Occidental Petroleum sold 19,500,000 of the Partnership’s common units, reducing its stake from approximately 45% to 42.5%.
Institutional investors play a crucial role in shaping the company’s stock price and strategic direction. Their substantial holdings often influence market perceptions and can lead to increased volatility in stock prices, especially during earnings announcements or significant corporate actions. With a combined institutional ownership of 97.5%, these investors are key stakeholders in governance and strategic decisions.
Furthermore, their voting power and ability to drive corporate governance matters are significant, as they often advocate for long-term value creation and sustainability initiatives.
Key Investors and Their Influence on Western Midstream Partners, LP (WES)
Key Investors and Their Impact on Stock
As of September 30, 2024, the notable investor in the company is Occidental Petroleum, which holds 165,681,578 common units, representing a 42.5% limited partner interest. Additionally, Occidental owns 9,060,641 general partner units, equivalent to a 2.3% general partner interest .
The public holds 214,873,849 common units, accounting for 55.2% of the limited partner interest .
Investor Influence
Occidental's significant stake in the company allows it to influence key decisions, including capital allocations and strategic direction. The company's board of directors declared cash distributions, including $340,858,000 for the quarter ending March 31, 2024, reflecting the financial health and commitment to return value to partners .
Recent Moves
In August 2024, Occidental sold 19,500,000 of the Partnership’s common units through an underwritten offering . This sale was part of a broader strategy to optimize its portfolio and liquidity, although the Partnership did not receive any proceeds from this public offering.
Additionally, the Partnership has an ongoing $1.25 billion buyback program, which allows the purchase of common units through December 31, 2024 . There were no repurchases during the nine months ended September 30, 2024, but in the previous year, 5,387,322 common units were repurchased, including 5,100,000 from Occidental for $134.6 million .
| Investor | Common Units Held | Limited Partner Interest (%) | General Partner Units Held | General Partner Interest (%) |
|---|---|---|---|---|
| Occidental Petroleum | 165,681,578 | 42.5 | 9,060,641 | 2.3 |
| Public | 214,873,849 | 55.2 | N/A | N/A |
Market Impact and Investor Sentiment of Western Midstream Partners, LP (WES)
Market Impact and Investor Sentiment
Investor Sentiment
The current sentiment among major shareholders toward the Partnership is generally positive. Notably, Occidental Petroleum Corporation holds a significant stake, owning 42.5% of the common units as of September 30, 2024, which reflects confidence in the Partnership's operational strategy and financial health.
Recent Market Reactions
In August 2024, Occidental sold 19,500,000 common units through an underwritten offering. This move did not generate proceeds for the Partnership, yet it indicates a strategic adjustment in their investment portfolio. Following this transaction, the stock experienced fluctuations, reflecting investor reactions to changes in ownership dynamics.
Analyst Perspectives
Analysts have expressed optimism regarding the impact of key investors on the Partnership's future. The recent acquisition of Meritage Midstream Services II, LLC for $885.0 million is expected to enhance operational capacity and revenue streams. Moreover, the Partnership reported a net income of $1.27 billion for the nine months ended September 30, 2024, which bolsters positive outlooks from financial analysts.
| Metric | Value |
|---|---|
| Ownership by Occidental | 42.5% of common units |
| Units Sold by Occidental (August 2024) | 19,500,000 |
| Acquisition Cost (Meritage) | $885.0 million |
| Net Income (Nine months ended September 30, 2024) | $1.27 billion |
Service revenues for the third quarter of 2024 reached $883.4 million, demonstrating a strong performance compared to the previous year. This growth is indicative of robust investor sentiment and market confidence in the Partnership's operational capabilities moving forward.
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Resources:
- Western Midstream Partners, LP (WES) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Western Midstream Partners, LP (WES)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Western Midstream Partners, LP (WES)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.