Kinetik & the Curious Habits of Fund Managers

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One observes, with a certain detached amusement, the activities of Cushing Asset Management. They have, it appears, doubled down on Kinetik Holdings – a midstream concern operating, as far as one can ascertain, in the rather desolate reaches of the Texas Delaware Basin. The purchase of an additional 855,000 shares, disclosed on January 27th, brings their total holding to a respectable 1.8 million – a sum representing, one is told, 3.8% of their assets under management.

  • An addition of 855,000 shares of Kinetik Holdings.
  • A quarter-end position value increased by $24.2 million – a figure inflated, no doubt, by the relentless churn of the market.
  • A post-trade stake of 1.8 million shares, valued at $66.5 million – a considerable sum to entrust to a company whose fortunes are tied to the extraction of hydrocarbons.

A Curious Transaction

The filing with the Securities and Exchange Commission reveals this increase in Kinetik Holdings shares. One wonders, naturally, what prompted such enthusiasm. Perhaps a particularly persuasive lunch? Or merely a desperate attempt to deploy capital before the inevitable correction?

Further Considerations

  • This acquisition elevates Kinetik’s share of Cushing’s 13F reportable assets to 3.8% – a percentage that, while statistically significant, hardly suggests a ringing endorsement.
  • The fund’s top holdings, for the sake of completeness, are as follows: NYSE:ET ($131.8 million, 7.6% of AUM), NYSE:TRGP ($125.7 million, 7.2% of AUM), NYSE:MPLX ($100.5 million, 5.8% of AUM), NYSE:WMB ($95.9 million, 5.5% of AUM), and NYSE:OKE ($95.4 million, 5.5% of AUM). One notes a certain predictability.

The Company, Briefly

Metric Value
Price (as of January 26th, 2026) $39.90
Market capitalization $6.4 billion
Revenue (TTM) $1.72 billion
Dividend yield 7.9%

A Snapshot of Operations

Kinetik Holdings, it seems, is engaged in the rather unglamorous business of gathering, transporting, compressing, processing, and treating oil and gas in the aforementioned Delaware Basin. They serve the upstream producers – those intrepid souls who continue to probe the earth for diminishing returns. Their business model, one is assured, is “fee-based” and reliant on “long-term contracts.” One anticipates, therefore, a steady decline, elegantly masked by accounting practices.

  • They provide the aforementioned services for a variety of hydrocarbons and water.
  • They cater to those operating in the Delaware Basin.
  • They operate on a fee-based model, dependent on long-term contracts.

Implications for Investors (or Those Who Consider Themselves Such)

Cushing Asset Management has, it appears, doubled its stake in Kinetik. This occurred during the final three months of 2025, a period characterised, if memory serves, by a general air of complacency. They now hold over 1.8 million shares, a gesture that suggests either remarkable foresight or a lamentable lack of imagination. The firm disclosed 60 equity positions, and Kinetik landed in the top ten – a dubious honour, one might suggest.

The investment represents 3.8% of their $1.7 billion in assets under management. One suspects that Cushing, like many of its peers, is simply throwing money at anything that yields a dividend. Kinetik’s stock, alas, has performed poorly, losing 35.5% over the past year – even after accounting for the dividend. The S&P 500, meanwhile, has enjoyed a rather vulgar surge, returning 15.4%.

However, Kinetik has recently increased its quarterly dividend by 4%, to $0.81. This, one is told, is a “positive sign.” At the new rate, the stock yields 8.1% – considerably higher than the S&P 500’s paltry 1.1%. One can only assume that investors are being compensated for the inherent risk of investing in a company whose future is inextricably linked to the price of oil. A comforting thought, perhaps, but hardly a reason for optimism.

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2026-01-28 00:53