Williams (WMB, Financial) (36%, 2.40%), the natural gas pipeline company, was also a top performer. The company’s midstream assets in the Gulf of Mexico, Northeast and Transco (arguably the best pipeline in the world, bi-directionally linking South Texas to New York City) grew EBITDA by a mid-single digit percentage. Natural gas demand has remained strong throughout the last several months. One of the reasons we had the opportunity to buy Williams at a discount was its exposure to customer Chesapeake Energy. However, when Chesapeake’s bankruptcy became official at the end of the quarter, Williams’ stock barely reacted as the market is coming to understand that this is not going to significantly impact Williams’ long term FCF and value per share. Despite the Williams stock appreciation this quarter, shares still trade for a significantly higher dividend yield and lower EBITDA multiple than the industry’s and stock’s own historical averages. The majority of Williams’ pipelines are growing their cash flows this year, and the company’s leverage is conservative.
From Mason Hawkins (Trades, Portfolio)' Longleaf Partners Fund second-quarter 2020 commentary.
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