Targa Resources Stock Rides A 5-Day Winning Streak To A 12% Gain
Shares of Targa Resources (TRGP) have closed higher in each of the last 5 sessions, a cumulative gain of 12.4%. That added about $7.0 billion to the company’s market value, which now stands at about $63.8 billion. The stock closed at $297.33 on Friday, November 13, 5.6% below its 52-week high of $314.99 and 80.0% above its low of $165.21.
TRGP Versus The S&P 500
Returns for TRGP and the S&P 500 over the streak and the periods around it, all ending Friday, November 13 and including dividends:
| Return Period | TRGP | S&P 500 |
|---|---|---|
| 1 Day | 0.3% | -0.4% |
| 5 Days (Current Streak) | 12.4% | 2.5% |
| 1 Month (21 Trading Days) | 5.7% | -2.3% |
| 3 Months (63 Trading Days) | 7.4% | -2.1% |
| Year To Date | 64.2% | 11.5% |
| 1 Year (252 Trading Days) | 77.6% | 11.7% |
A Stock-Specific Run, Or A Market Move?
Over the same 5 trading days, the S&P 500 returned +2.5% including dividends, so the run is mostly Targa Resources’ own story rather than the market’s. 15 other S&P 500 stocks are currently on winning streaks of 5 days or longer. Over the past three months the stock is up 7.4%, a window that includes the streak; over the other 58 sessions of that window it was down 4.4%.
Do The Fundamentals Support The Run?
On the fundamentals, revenue grew 4.7% over the last twelve months, against a median of 20.8% for S&P 500 Energy stocks; its operating margin is 22.5%, versus a median of 23.3%; and the stock trades at 26.1 times trailing earnings against a median of 14.7. The numbers make the run harder to justify: revenue growth below the median, margins below the median and a multiple well above the median. At this price, the stock is asking a lot of the business.
If you are looking for strength with more behind it than a hot tape, our Guidance Momentum screen surfaces the names where management raised its own outlook.
For anyone who would rather back the theme than one company, an energy ETF like XLE holds the whole group, not just this stock. It is still a concentrated bet on one theme, which is the gap the portfolio below is built to close.
One Hot Stock Is A Story. Thirty Sound Ones Are A Strategy
A streak like this earns a place on your watchlist, and it also earns a question: how much of your outcome do you want depending on one company keeping this up?
The Trefis High Quality (HQ) Portfolio answers it with breadth: roughly 30 businesses picked for consistent cash generation, strong margins, and balance-sheet strength, sized and rebalanced by rules. It has a track record of outpacing a benchmark that combines the S&P 500, the S&P MidCap 400, and the Russell 2000. Follow the story; invest in the strategy.