Republican Representative Mark Green, who has served Tennessee’s 7th congressional district since 2019, has recently disclosed a lucrative stock trade involving NGL Energy Partners (NYSE: NGL).
Green sold between $15,000 and $50,000 worth of NGL shares for $4.74, highlighting his strategic trading prowess and significant gains in a challenging market.
Mark Green’s engagement with NGL Energy Partners dates back several years, but his recent trading activity has drawn considerable attention.
The journey began in early 2022
Over the past two and a half years, Green has adeptly managed to almost double his initial investment in this small-cap stock, showcasing a well-timed strategy.
The journey began in early 2022 when Green acquired NGL shares for $2.13, investing between $15,000 and $50,000.
Over the following 18 months, he continued to accumulate shares at various price points.
While the precise number of shares is not publicly disclosed, estimates suggest that the average purchase price during this period was around $3.25.
Since January 2024, Green has progressively sold off his shares. Notably, a significant portion of these transactions occurred at $5.85 per share, just 5.5% below the stock’s 52-week high.
Despite spreading his sales across the first half of the year, Green managed to achieve an average selling price close to $5.70.
This savvy trading approach has resulted in a remarkable return of over 75% on his total holding.
In comparison, the S&P 500 index has returned only 25.85% over the same period, underscoring Green’s impressive investment acumen.
A visual representation of his buy and sell ranges illustrates the effectiveness of Green’s strategy.
Source: TradingView
However, it’s important to consider the broader context of NGL Energy Partners’ financial performance.
NGL Energy Partners’ $3.1 billion debt
The company has faced substantial revenue declines over the past year, with the quarter ending March 2024 marking its worst EPS performance since late 2020.
Despite these financial struggles, Green’s decision to sell his shares at favorable prices suggests a well-calibrated exit strategy.
NGL Energy Partners is currently burdened with $3.1 billion in debt and only $5 million in cash reserves.
The company’s management is focusing on debt repayment and eliminating preferred distributions, with hopes of improving returns for common shareholders in the future.
Nevertheless, potential investors should be cautious. The stock faces risks, including a possible slowdown in drilling activity, especially in the Delaware Basin, and vulnerability to fluctuating oil prices.
Currently, with oil prices surging, any geopolitical stabilization could lead to a sharp decline in oil prices and, consequently, NGL’s stock value.
Given Green’s position on the Foreign Affairs Committee, it’s plausible that he may have insights into global geopolitical issues that could influence market conditions.
The stock is currently trading 33% below its 52-week high, reflecting the volatility and uncertainty surrounding the energy sector.
As NGL Energy Partners navigates these challenges, Green’s strategic trading underscores the potential for significant gains even in a volatile market.
Investors looking to follow in his footsteps should remain aware of the inherent risks and closely monitor the company’s evolving financial landscape.
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