Mr. Judge: We focus our attention on gas transmission companies and currently we're looking at the commodity sensitive portions of many of the infrastructure companies within the space. What we're seeing is continued robust investment in the gas transmission pipeline area. But given the market's concern about a slowing economy and slowing demand for natural gas, the investor reaction to many of the companies in the sector is that the commodity-sensitive portion of their business is seeing lower profit. As a result, we've seen lower stock prices and lower earnings expectations. Long term, there continue to be questions on where and whether or not big pipelines will continue to be built if the economy goes into a prolonged recessionary environment and/or lower returns are earned on new projects being proposed.
TWST: Have projects been slowing or put on hold?
Mr. Judge: There's mixed data out there on projects. What we are hearing is that
most companies are nervous about slowing demand and are tentative about new
projects. However, to date, we haven't seen many cancellations. In fact, most
companies are saying that new supply areas have been the intrinsic growth driver
for new big gas transmission projects and the shift continues. Those appear to
be continuing and those projects with signed contracts still seem to be
progressing.
Tickers included in this excerpt: EP, SE
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