Do You Believe in the Growth Potential of Targa Resources Corp. (TRGP)?

Oakmark Funds, advised by Harris Associates, released its “Oakmark Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund underperformed its benchmark, the S&P 500 Index, but outperformed the benchmark since inception. The largest contributors to performance were financials and energy, at the sector level, while health care and consumer staples detracted. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Oakmark Fund highlighted stocks such as Targa Resources Corp. (NYSE:TRGP). Targa Resources Corp. (NYSE:TRGP) owns and develops a portfolio of complementary domestic infrastructure assets. The one-month return of Targa Resources Corp. (NYSE:TRGP) was -3.05%, and its shares lost 2.69% of their value over the last 52 weeks. On October 9, 2025, Targa Resources Corp. (NYSE:TRGP) stock closed at $161.30 per share, with a market capitalization of $34.71 billion.

Oakmark Fund stated the following regarding Targa Resources Corp. (NYSE:TRGP) in its third quarter 2025 investor letter:

"Targa Resources Corp. (NYSE:TRGP) is a leading midstream natural gas and natural gas liquids (NGL) company. Targa is a part of a group that controls 90% of the fractionation capacity in the largest hub for NGLs in the world, known as Mont Belvieu. Thanks to the region's unique topography and proximity to the Gulf Coast, Targa benefits from meaningful cost advantages and significant barriers to entry. We like that Targa generates approximately 90% of its earnings through multi-year fee-based arrangements with its customer base, which provides protection against oversupply or re-contracting. Uncertainty around Permian oil production growth has recently weighed on the share price. However, in our view, Targa remains well-positioned to grow, even if the Permian slows dramatically. We were happy to purchase shares at a discount to peers based on normalized earnings power and our estimate of intrinsic value."

Targa Resources Corp. (NYSE:TRGP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 48 hedge fund portfolios held Targa Resources Corp. (NYSE:TRGP) at the end of the second quarter, compared to 55 in the previous quarter.  While we acknowledge the potential of Targa Resources Corp. (NYSE:TRGP) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Targa Resources Corp. (NYSE:TRGP) and discussed the list of energy stocks that are declining in the first week of October. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.