7. AFFORDABLE AND CLEAN ENERGY

Citigroup Inc. Reportedly Cuts Stake in Genesis Energy, LP by 61.5%: Should Investors be Worried?

Written by Amanda

On June 6, 2023, it was reported that Citigroup Inc. had reduced its stake in shares of Genesis Energy, L.P. (NYSE:GEL) by a staggering 61.5%. The institutional investor sold 77,663 shares during the fourth quarter and owned only 48,611 shares of the pipeline company’s stock at the time of filing with the Securities and Exchange Commission (SEC). The holdings were valued at $496,000.

This news has sent shockwaves through the investment community as investors are now questioning whether or not they should continue to hold GEL stocks in their portfolios. The sudden divestment by one of the world’s largest financial institutions is causing many to wonder if there is something wrong with the pipeline giant.

However, it is important to note that Genesis Energy last issued its earnings results on May 4th of this year. During the first quarter of 2023, GEL reported a disappointing net loss of ($0.21) EPS for the quarter which missed analyst expectations by ($0.34). Despite this setback, however, GEL boasted revenue of $790.60 million during the same period and a remarkable return on equity of 9.06% and a net margin of 2.68%.

One can speculate that Citigroup Inc.’s move to reduce holdings may simply be due to business strategy rather than an indictment on Genesis Energy’s performance as a whole.

It is important to examine what sets GEL apart in terms of services they provide for midstream operations and production within their strong verticals like natural soda ash production while operating through their Offshore Pipeline Transportation segment that owns interests in crude oil and natural gas pipeline transportation and handling operations.

Genesis Energy LP operates through four unique segments: Offshore Pipeline Transportation, Sodium Minerals and Sulfur Services, Onshore Facilities and Transportation, and Marine Transportation; which provides investors with multiple opportunities for diversification within their portfolio which should always be a crucial decision-making condition when making investments.

While the loss of Citigroup Inc.’s position in GEL may appear alarming at first glance, there could be other factors at play. Investors should also remember that some holding companies perform periodic assessments of their portfolios, and during those reviews if they find anything that doesn’t fit their overall vision or strategy, such entities make strategic adjustments- buying and/or selling positions.

Thus, while the news has raised a few red flags concerning Genesis Energy’s long-term viability as a profitable investment opportunity for some investors, it is crucial to take a step back and consider if divesting was merely a part of Citigroup Inc.’s broader investment strategy- all while considering GEL’s four unique segments with investors better equipped to navigate the financial market based on thorough research within this high demand midstream operation.

GEL

Buy

Updated on: 06/06/2023

Price Target

Current $10.02

Concensus $13.00


Low $13.00

Median $13.00

High $13.00

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Social Sentiments

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Analyst Ratings

Analyst / firm Rating
Wells Fargo Buy

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Genesis Energy LP: A Look into the Market and Recent Moves by Institutional Investors and Hedge Funds


Genesis Energy LP: A Look into the Market and Recent Moves

Genesis Energy LP, a renowned midstream services provider that produces natural soda ash was recently in the news for its activities with hedge funds and other institutional investors. According to reports, these firms have either added to or reduced their stakes in GEL, thus causing an interesting trend for this pipeline company. Captrust Financial Advisors, Tower Research Capital LLC TRC, Victory Capital Management Inc., Oppenheimer Asset Management Inc., Arrow Investment Advisors LLC are some of the most recent entities interested in Genesis Energy.

Captrust Financial Advisors increased their holdings in Genesis Energy by 90.8% during the second quarter of June 2023. They currently own over 5,000 shares of GEL stock worth $40,000 after purchasing an additional 2,395 shares during the last quarter. Tower Research Capital and Victory Capital have respectively recently purchased new stakes in the company valued at approximately $46,000 and $93,000 during this year’s third quarter.

One other significant investor that boosted their stake in Genesis Energy is Arrow Investment Advisors LLC which now owns over 23k shares of GEL’s stock worth over $200k after purchasing an additional 3,450 units during last quarter- representing a spike of 17%. Based on a report indicating statements from ETFDailyNews.com published on June 6th., Institutional investors own about 70.04% of GEL’S stock as at June this year.

With all these moves made by top-tier sponsors and market analysts keeping their gaze fixed on what’s going to happen next with Genesis Energy LP, it’s no surprise that people want to know more background information about this entity.

GEL stock opened at $9.89 on Tuesday with a market capitalization of $1.21 billion. Its fifty-two-week low is at $7.61 while its fifty-two week high is pegged at $12.95. Moreover, GEL holds a -247.25 price-to-earnings ratio and 2.20 beta respectively while having a debt-to-equity ratio of 4.16, a quick ratio of 1.03, and a current ratio of 1.18.The Offshore Pipeline Transportation segment owns interests in crude oil and natural gas pipeline transportation while the Sodium Minerals & Sulfur Services, Onshore Facilities & Transportation, and Marine Transportation segments serve as other operations for the firm.

Analyst reports on Genesis Energy LP have continually provided insights that keep traders alert and interested in the company’s activities over time. Wells Fargo & Company recently prospected GEL with an “equal weight” rating lifted their target to $13 from $12 in a research note on Thursday, March 2nd this year. Royal Bank of Canada drops their target price from $19 to $17 respectively with an “outperform” rating insight on Friday, April 21st last quarter while StockNews.com acquired coverage on shares of Genesis Energy putting down an earlier “hold” score for the company.

With all these happening within the space Genesis Energy and time rolling by speedy-fast coupled with its recent boost in institutional investors through signals not limited to the moves made by Captrust Financial Advisors, Tower Research Capital LLC TRC among others it is hard not to wonder what future holds for this prominent midstream services provider that produces natural soda ash.
 
In conclusion, one expects further moves from hedge funds and institutional investors aiming likely at expanding stakes or just trying to analyze where Genesis Energy LP stands currently on stock value before making any move as regards investment or exiting the firm through selling off shares. It remains intriguing times ahead for Genesis Energy LP followers closely keeping their gaze fixed on what is going to happen next in the thrilling world of Midstream Services environment powered by none other than GEL!

Source: beststocks.com

About the author

Amanda

Hi there, I am Amanda and I work as an editor at impactinvesting.ai;  if you are interested in my services, please reach me at amanda.impactinvesting.ai