Global Partners LP: Contrarian Opportunities Amid Insider Divergence

Is GLP's COO sale a red flag or a buying signal?
Global Partners LP (NASDAQ: GLP), a midstream energy giant, has drawn attention after COO Mark Romaine's recent $462K sale of shares—a move that contrasts starkly with widespread buying activity by affiliated entities. For contrarian investors, this divergence presents a compelling puzzle: When insiders sell, but the company's leadership buys, who should we trust?

Let's dissect the signals.

The Insider Split: A COO's Sale vs. Affiliated Buying Frenzy

On July 15–16, 2025, Romaine sold 9,000 GLP units under a pre-arranged Rule 10b5-1 plan, reducing his holdings by 5.4%. While this might spook short-term traders, the sale's mechanical nature—part of a pre-planned transaction—dampens its urgency. Contrast this with GLOBAL GP, L.L.C., GLP's general partner, which has been aggressively purchasing shares:
- June 2025 alone: Bought 1.33 million shares at prices between $52.72 and $55.43.
- 2024–2025 total purchases: Over 4 million shares, signaling long-term confidence.

This divergence suggests two narratives:
1. Romaine's sale: A personal financial decision, likely unrelated to company fundamentals.
2. Affiliated buying: A strategic bet on GLP's undervalued shares or sector tailwinds.

Why the Contrarian Play Might Pay Off

1. The Energy Infrastructure Tailwind

GLP operates in the energy infrastructure sector, which is resilient and growing. Key trends:
- Global energy demand: Set to hit record highs in 2025, driven by AI's insatiable power needs (e.g., data centers now consume 4% of U.S. electricity).
- Grid modernization: Transmission assets like those acquired by KKR (a $2.8B deal in 2025) are critical to integrating renewables. GLP's terminal network and fuel distribution business are core to this shift.

2. Dividend Strength as a Safety Net

GLP has maintained a 5.9% dividend yield with consistent quarterly payments since 2021. While its “dividend sustainability score” is rated “low” (50%), the payout ratio (92% of EBITDA) remains manageable given stable cash flows from its terminal operations. For contrarians, this offers downside protection.

3. Mispricing Opportunity?

At $51.38 per share (July 2025), GLP trades at a 10.2x EBITDA multiple, below its historical average. Affiliated buyers' activity suggests they see value here—a view contrarians should consider.

Risks to Monitor

• Dividend sustainability: The 50% score warns of potential cuts if EBITDA shrinks.
• Sector headwinds: Tariffs, supply chain bottlenecks (e.g., battery component shortages), and regulatory delays could slow growth.
• Romaine's signal: While mechanical, his sale could reflect a shift in personal priorities—though unlikely to reflect company-wide pessimism.

Investment Thesis: Contrarian Buy with Caution

Buy GLP if:
- You believe affiliated buyers are correct in their valuation (and Romaine's sale is noise).
- You're comfortable with energy infrastructure's long-term growth story and GLP's dividend.

Hold or Sell if:
- The dividend is cut, or EBITDA drops below $250 million (2024: $270M).
- Global GP halts its buying spree, signaling a loss of confidence.

Final Take

GLP's insider divergence is a classic contrarian crossroads. While Romaine's sale creates doubt, the affiliated entity's buying—and the sector's structural tailwinds—suggest a high-reward, high-risk opportunity. For investors willing to bet on energy infrastructure's resilience and GLP's dividend, now could be the time to dip your toes into this midstream leader. Just keep an eye on those EBITDA numbers.

Always consult your financial advisor before making investment decisions.