Billionaire Bruce Berkowitz’s Top Stock Picks: Focus on Energy Transfer LP (NYSE:ET)
In our latest exploration of the investment strategies of billionaire Bruce Berkowitz, the founder of Fairholme Capital Management, we take a deep dive into one of his top stock choices—Energy Transfer LP (NYSE:ET). This article evaluates how ET stands out among Berkowitz’s selected stocks with the highest upside potential.
Understanding Bruce Berkowitz’s Investment Philosophy
Bruce Berkowitz is a renowned hedge fund manager known for his distinctive investment style characterized by high conviction and a focus on undervalued assets. His knack for identifying opportunities where the market often overlooks hidden values sets him apart in the financial landscape. With a career marked by smart, bold bets, Berkowitz holds a powerful reputation; he was recognized as Morningstar’s Domestic Stock Fund Manager in 2009 and named Money Manager of the Year by Institutional Investor Magazine in 2013.
Berkowitz’s approach emphasizes the importance of owning a concentrated portfolio. He famously states, “You only need a few ideas in a lifetime to do unbelievably well.” This mantra reflects his belief in deep investment research and understanding rather than a diversified but superficial portfolio.
“Ignore the crowd. Count what matters.”
Berkowitz’s credentials not only lie in his successful stock picks but also in his unwavering focus on reality. He views distressed assets as opportunities, relying on thorough analysis rather than succumbing to market panic.
Fairholme Capital Management and Its Focus
When Berkowitz founded Fairholme, his mission was clear: manage his family’s wealth with a focus on value creation rather than merely gathering assets. Over time, he evolved his strategy to consider not just financial metrics but also the quality of management and company culture. This holistic approach aligns with his philosophy that good leadership is essential, especially in challenging market conditions.
His preference for U.S. markets stems from a belief in the importance of understanding a company’s operational landscape, including its regulatory environment, tax implications, and supply chain intricacies. By limiting his focus to three to six positions within the U.S., Berkowitz immerses himself deeply into each industry and its dynamics.
“His aptitude for picking stocks sets him apart from his peers, and Fairholme’s portfolio is filled with attractively priced firms that generate high free cash flow.”
Energy Transfer LP: A Closer Look
As part of his concentrated investment strategy, Berkowitz maintains a significant stake in Energy Transfer LP, totaling $16,708,311. As of late 2024, this stock is highly regarded, with 37 hedge fund holders indicating continued interest in the company’s potential. Analysts project an average upside potential of 34.5% for ET.
Energy Transfer LP, known for its extensive energy-related services across the U.S., has made strategic acquisitions—such as Lotus Midstream and Crestwood Equity Partners—to strengthen its foothold in the booming Permian Basin. These expansions have positioned the company favorably in a region crucial for energy production.
On May 7, Michael Blum from Wells Fargo reaffirmed an “Overweight” rating for ET, albeit with a slight revision in its price target from $22.00 to $21.00. This rating underscores sustained optimism about Energy Transfer’s performance relative to other sector stocks. While recent earnings reports have shown mixed results, with EPS hitting $0.37 against a $0.36 estimate, the overall outlook remains promising, bolstered by a robust 7.54% dividend yield that has seen growth over the past three years.
Conclusion: Where Does ET Rank?
Overall, Energy Transfer LP proudly ranks 1st among Bruce Berkowitz’s high-potential stock picks. However, investors should consider complementary opportunities within the market. For those intrigued by emerging technologies, certain AI stocks might offer even more substantial upside potential in shorter time frames. For example, one highly promising AI stock has already shown gains in 2025 while many popular AI choices have slipped.
To discover how to bolster your portfolio and tap into the potential of undervalued assets like ET and beyond, explore our report on the "Cheapest AI Stock" that trades under 5 times its earnings.
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Disclosure: This analysis is based on publicly available data and does not constitute financial advice.