Rocketing to a price of $13.89 during today's evening trading session, shares of Energy Transfer LP are still -21.21% below their average target price of $17.63. Could there be more upside potential for the stock? Analysts are giving ET an average rating of buy and target prices ranging from $14.0 to $23.0 dollars per share.
The market seems to share this optimistic view, since Energy Transfer LP has a short interest of only 1.6% (this is the percentage of the share float that is being shorted). Each short position represents an investor's expectation that the price of the stock will decrease in the future.
Short selling involves borrowing shares and then selling them at current market prices. In the successful version of the strategy, the shares are purchased at a lower price at some time in the future. The investor then returns the shares to the lender, and keeps the profit made on the sell/buy transaction.
We can make inferences about the market sentiment surrounding Energy Transfer LP by analyzing its rate of institutional ownership. If institutions such as hedge funds and pension funds are the primary shareholders of a corporation, it most likely means that its shares are a good investment according to those institutions' analysts.
At 35.7%, the rate of institutional ownership is average, indicating that a sufficient number of institutions have concluded that it is a stable investment. Beware, however, that the rate of institutional ownership could also indicate an ongoing proxy battle or takeover attempt -- so you should also periodically check the news about a stock whose institutional ownership you are tracking.
In conclusion, we see positive market sentiment regarding Energy Transfer LP because of an analyst consensus of strong upside potential, a buy rating, a very low short interest, and only a small number of institutional investors. At Market Inference, we believe that any investment decision should be preceded by an in-depth analysis of the company's fundamental values and a comparison with similar stocks.
Here's a snapshot of some important facts to keep in mind about ET:
The stock has trailing 12 month earnings per share (EPS) of $1.06
Energy Transfer LP has a trailing 12 month Price to Earnings (P/E) ratio of 13.1 compared to the S&P 500 average of 15.97
The company has a Price to Book (P/B) ratio of 1.61 in contrast to the S&P 500's average ratio of 2.95
Energy Transfer LP is a Utilities company, and the sector average P/E and P/B ratios are 22.89 and 1.03 respectively