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BPL, EPB, PAA, SXL, MMP, RGP, Oil and Gas - Pipeline Stocks Overvalued

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^{Published in Stocks and Investing on Tuesday, August 30th 2011 at 6:51 GMT by WOPRAI}  

August 30, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Oil and Gas - Pipeline sector and these stocks are the most undervalued as of today. BUCKEYE PARTNERS LP (NYSE:BPL), EL PASO PIPELINE PARTNERS LP (NYSE:EPB), PLAINS ALL AMER PIPELINE LP (NYSE:PAA), SUNOCO LOGISTICS PARTNERS LP (NYSE:SXL), MAGELLAN MIDSTREAM PARTNERS (NYSE:MMP), (NYSE:RGP) are all expected to go Down as they are Overvalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.

The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:

     Symbol     Company Name                        Last Close     Fair Value     Valuation                   Industry               
     BPL        BUCKEYE PARTNERS LP                 62.14          54.04          15.00% Overvalued           Oil and Gas - Pipeline 
     EPB        EL PASO PIPELINE PARTNERS LP        36.18          35.4           2.20% Overvalued            Oil and Gas - Pipeline 
     PAA        PLAINS ALL AMER PIPELINE LP         59.7           57.73          3.40% Overvalued            Oil and Gas - Pipeline 
     SXL        SUNOCO LOGISTICS PARTNERS LP        84             70.45          19.20% Overvalued           Oil and Gas - Pipeline 
     MMP        MAGELLAN MIDSTREAM PARTNERS         59.62          46.17          29.10% Overvalued           Oil and Gas - Pipeline 
     RGP                                            23.59          18.68          26.30% Overvalued           Oil and Gas - Pipeline 

Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.

Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.

BUCKEYE PARTNERS LP (NYSE:BPL) - Buckeye Partners, L.P. primarily operates refined petroleum products pipeline systems in the United States. The companys Pipeline Operations segment transports refined petroleum products, including gasoline, jet fuel, diesel fuel, heating oil, and kerosene to terminals and airports located within end-use markets. This segment also transports other refined products, such as propane and butane, refinery feedstock, and blending components. Its Terminalling and Storage segment provides bulk storage and throughput services to refined petroleum products and other renewable fuels. The companys Natural Gas Storage segment provides natural gas storage services through a facility located in northern California. Its Energy Services segment distributes refined petroleum products, including gasoline; propane; and petroleum distillates, such as heating oil, diesel fuel, and kerosene to wholesalers and commercial users. The companys Development and Logistics segment offers terminal and pipeline operations and maintenance services, and related construction services for third parties, as well as provides engineering and construction management services to chemical companies. It also owns and leases a portion of its pipeline to a third-party chemical company; owns interest in a crude butadiene pipeline; and owns and operates an ammonia pipeline located in Texas. As of December 31, 2009, it owned and operated approximately 5,400 miles of independent refined petroleum products pipeline system and 67 products terminals; operated and maintained approximately 2,400 miles of pipeline under agreements with oil and chemical companies; and owned and operated a natural gas storage facility in northern California, which provided approximately 40 billion cubic feet of natural gas storage capacity in the United States. Buckeye GP LLC serves as the general partner of the company. Buckeye Partners was founded in 1986 and is based in Houston, Texas.

EL PASO PIPELINE PARTNERS LP (NYSE:EPB) - El Paso Pipeline Partners, L.P. engages in the ownership and operation of natural gas transportation pipelines and storage assets in the United States. The company holds a 100% interest in Wyoming Interstate Company, Ltd. (WIC), an interstate pipeline transportation company located in Wyoming, Utah, and Colorado. It operates approximately 800-mile WIC interstate natural gas pipeline system with a design capacity of approximately 3.5 billion cubic feet per day. The company also owns a 58% general partner interest in Colorado Interstate Gas Company, which operates an interstate natural gas pipeline system with approximately 4,300 miles of pipeline with a design capacity of approximately 4.6 billion cubic feet per day; and associated storage facilities with 37 billion cubic feet of underground working natural gas storage capacity. In addition, it owns a 60% general partner interest in Southern Natural Gas Company that operates an interstate natural gas pipeline system with approximately 7,600 miles of pipeline with a design capacity of approximately 3.7 billion cubic feet per day; and associated storage facilities with a total of approximately 60 billion cubic feet of underground working natural gas storage capacity. Further, the company owns interests in Elba Express Company, L.L.C., which operates an approximately 200-mile pipeline with a design capacity of 945 million cubic feet per day; and Southern LNG Company, L.L.C. that owns a liquefied natural gas receiving terminal with a storage capacity of 11.5 equivalent billion cubic feet. It serves natural gas distribution and industrial companies, electric generation companies, natural gas producers, other natural gas pipeline companies, and natural gas marketing and trading companies. El Paso Pipeline GP Company, L.L.C. serves as the general partner of the company. The company was founded in 2007 and is based in Houston, Texas. El Paso Pipeline Partners, L.P. is a subsidiary of El Paso Pipeline LP Holdings, L.L.C.

PLAINS ALL AMER PIPELINE LP (NYSE:PAA) - Plains All American Pipeline, L.P. engages in the transportation, storage, terminalling, and marketing of crude oil, refined products, and liquefied petroleum gas and other natural gas-related petroleum products (LPG) in the United States and Canada. It operates in three segments: Transportation, Facilities, and Supply and Logistics. The Transportation segment involves in transporting crude oil and refined products on pipelines, gathering systems, trucks, and barges. As of December 31, 2010, this segment had 16,000 miles of active crude oil and refined products pipelines and gathering systems; 25 million barrels of above-ground tank capacity used primarily to facilitate pipeline throughput; 56 trucks and 352 trailers; and 65 transport and storage barges, and 39 transport tugs. The Facilities segment provides storage, terminalling, and throughput services for crude oil, refined products, and LPG and natural gas, as well as offers LPG fractionation and isomerization services. The Supply and Logistics segment purchases crude oil at the wellhead, and pipeline and terminal facilities; foreign cargoes at their load port and various other locations in transit; and refined products and LPG from producers, refiners, and other marketers. This segment also resells or exchanges crude oil, refined products, and LPG at various points along the distribution chain to refiners or other resellers; and transports crude oil, refined products, and LPG on trucks, barges, railcars, pipelines, and ocean-going vessels. It had 522 trucks and 630 trailers; and 1,473 railcars. The company also develops and operates natural gas storage facilities. Plains All American Pipeline, L.P. was founded in 1998 and is based in Houston, Texas.

SUNOCO LOGISTICS PARTNERS LP (NYSE:SXL) - Sunoco Logistics Partners L.P. engages in the transport, terminalling, and storage of refined products and crude oil, as well as the purchase and sale of crude oil in the United States. Its Refined Products Pipeline System segment owns and operates approximately 2,200 miles of refined product pipelines that transport gasoline, heating oil, diesel and jet fuel, and liquefied petroleum gas (LPG). This segment also includes approximately 100-mile refined products Harbor pipeline, and 50 miles of inter refinery pipelines; and various joint venture interests in refined product pipeline companies. The companys Terminal Facilities segment consists of 42 refined product terminals with an aggregate storage capacity of 7.2 million barrels, primarily serving the Refined Products Pipeline System; the Nederland Terminal, a 20.2 million barrel marine crude oil terminal on the Texas Gulf Coast; a 2.0 million barrel refined products terminal serving Sunocos Marcus Hook refinery near Philadelphia, Pennsylvania; 1 inland and 2 marine crude oil terminals with a combined capacity of 3.4 million barrels, and related pipelines that serve Sunocos Philadelphia refinery; and a 1.0 million barrel LPG terminal near Detroit, Michigan. Its Crude Oil Pipeline System segment gathers, purchases, sells, and transports crude oil principally in Oklahoma and Texas. This segment consists of approximately 4,900 miles of crude oil trunk pipelines; approximately 500 miles of crude oil gathering lines; approximately 110 crude oil transport trucks; and approximately 100 crude oil truck unloading facilities. This segment also holds a 91% interest in the Mid-Valley Pipeline Company that owns approximately 1,000 miles of crude oil pipelines; a 60.3% interest in West Texas Gulf Pipe Line Company, which includes approximately 600 miles of crude oil pipe; and a 37.0 percent undivided interest in the 100-mile Mesa Pipe Line system. The company was founded in 2001 and is based in Philadelphia, Pennsylvania.

MAGELLAN MIDSTREAM PARTNERS (NYSE:MMP) - Magellan Midstream Partners transports, stores, and distributes refined petroleum products. Its pipelines run from the Texas Gulf Coast to Colorado, Illinois, Minnesota, and North Dakota. It also pipes ammonia Texas and Oklahoma to the Midwest. Customers include independent and integrated oil companies, wholesalers, retailers, railroads, airlines, and regional farm cooperatives. The company was founded in 2000 and is based in Tulsa.

(NYSE:RGP) -

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