Summit Midstream Partners (SMLP) in Legacy Ridge 2024 Q2

Restructuring and Strategic Management Drive Potential Upside

Apr 15, 2025

Summary

Focus on restructuring and balance sheet improvement under new management.
Recent asset divestitures and refinancing efforts have strengthened financial position.
Risks include historical stock price decline and reliance on management execution.
Potential for significant upside with a target value of $80 per share.
Future strategy may involve share repurchases over dividends.

Summit Midstream Partners (SMLP, Financial) was discussed in the Legacy Ridge 2024 Q2 fund letter as a company undergoing significant restructuring. Under the leadership of Heath Deneke, the company has divested $700 million worth of assets and refinanced its debt, positioning itself for future growth. Despite a historical decline in stock price, the fund sees potential upside, valuing the company at $80 per share.

"The base business is worth $60-$70 a share in our opinion and Double E is worth $18+ a share, for a combined value of ~$80, or 125% above the current price." — Legacy Ridge Capital Management, 2024 Mid-Year Letter

Read full letter at gurufocus Legacy Ridge 2024 Q2 page.

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