Here's Why Oakmark Select Fund Backs Targa Resources (TRGP)

Oakmark Funds, advised by Harris Associates, released its “Oakmark Select Fund” fourth-quarter 2025 investor letter. Oakmark Select Fund is a non-diversified fund that aims to deliver capital appreciation by investing in mid and large-cap US companies. A copy of the letter can be downloaded here. In the quarter, the fund (investor class) outperformed the S&P 500 Index, returning 8.42% vs. 2.66% for the index. Communication services and financials were the top contributors at the sector level, while industrials detracted from the performance. In addition, you can check the Fund’s top five holdings to determine its best picks for 2025.

In its fourth-quarter 2025 investor letter, Oakmark Select 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 -1.15%, and its shares lost 12.27% of their value over the last 52 weeks. On January 13, 2026, Targa Resources Corp. (NYSE:TRGP) stock closed at $180.28 per share, with a market capitalization of $38.795 billion.

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

"Targa Resources Corp. (NYSE:TRGP) is a leading midstream natural gas and natural gas liquids (NGL) company. Targa is 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, 50 hedge fund portfolios held Targa Resources Corp. (NYSE:TRGP) at the end of the third quarter, up from 48 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 shared the list of best energy stocks with huge upside potential. In addition, please check out our hedge fund investor letters Q4 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.