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EPD, KMR, NGLS, ETE, OKS, WPZ, Oil and Gas - Pipeline Stocks Overvalued

^{Published on 2011-08-30 06:42:10 - 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. ENTERPRISE PRODUCTS PARTNERS (NYSE:EPD), KINDER MORGAN MANAGEMENT LLC (NYSE:KMR), TARGA RESOURCES PARTNERS LP (NYSE:NGLS), ENERGY TRANSFER EQUITY LP (NYSE:ETE), ONEOK PARTNERS LP (NYSE:OKS), WILLIAMS PARTNERS LP (NYSE:WPZ) 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               
     EPD        ENTERPRISE PRODUCTS PARTNERS        41.3           33.79          22.20% Overvalued           Oil and Gas - Pipeline 
     KMR        KINDER MORGAN MANAGEMENT LLC        59.8           58.36          2.50% Overvalued            Oil and Gas - Pipeline 
     NGLS       TARGA RESOURCES PARTNERS LP         33.9           30.73          10.30% Overvalued           Oil and Gas - Pipeline 
     ETE        ENERGY TRANSFER EQUITY LP           38.54          34.45          11.90% Overvalued           Oil and Gas - Pipeline 
     OKS        ONEOK PARTNERS LP                   43.15          36.2           19.20% Overvalued           Oil and Gas - Pipeline 
     WPZ        WILLIAMS PARTNERS LP                52.99          44.69          18.60% 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.

ENTERPRISE PRODUCTS PARTNERS (NYSE:EPD) - Enterprise Products Partners L.P. provides a range of services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, refined products, and petrochemicals in the continental United States, Canada, and Gulf of Mexico. The companys NGL Pipelines & Services segment engages in natural gas processing and related NGL marketing activities. This segment offers ethane, propane, normal butane, isobutene, and natural gasoline. It also operates NGL pipelines of approximately 16,900 miles; NGL and related product storage and terminal facilities; NGL fractionation facilities; and import and export terminals. Its Onshore Natural Gas Pipelines & Services segment operates approximately 19,800 miles of onshore natural gas pipeline systems for the gathering and transportation of natural gas in Alabama, Colorado, Louisiana, Mississippi, New Mexico, Texas, and Wyoming. This segment also owns two salt dome natural gas storage facilities located in Mississippi; and leases natural gas storage facilities located in Texas and Louisiana, as well as involves in natural gas marketing business. The companys Onshore Crude Oil Pipelines & Services segment operates approximately 4,700 miles of onshore crude oil pipelines; and gathers and transports crude oil primarily in Oklahoma, New Mexico, and Texas to refineries, centralized storage terminals, and connecting pipelines. Its Offshore Pipelines & Services segment operates approximately 1,400 miles of offshore natural gas pipelines, as well as 1,000 miles of offshore Gulf of Mexico crude oil pipeline systems; and six multi-purpose offshore hub platforms. The companys Petrochemical & Refined Products Services segment consists of propylene fractionation plants and related marketing activities; butane isomerization facilities; an octane enhancement facility; refined products pipelines; and marine transportation assets and other services. Enterprise Products Partners L.P. was founded in 1968 and is based in Houston, Texas.

KINDER MORGAN MANAGEMENT LLC (NYSE:KMR) - Kinder Morgan Management, LLC operates as an energy transportation and storage company in North America. It transports natural gas, gasoline, crude oil, carbon dioxide, and other products; and stores petroleum products and chemicals, as well as handles bulk materials, such as coal and petroleum coke. As of December 31, 2009, it owned and operated approximately 28,000 miles of pipelines and 180 terminals. The company was founded in 2001 and is based in Houston, Texas.

TARGA RESOURCES PARTNERS LP (NYSE:NGLS) - Targa Resources Partners LP provides midstream natural gas and natural gas liquid (NGL) services in the United States. The company operates through two divisions, Natural Gas Gathering and Processing, and NGL Logistics and Marketing. The Natural Gas Gathering and Processing division engages in gathering, compressing, dehydrating, treating, conditioning, processing, marketing, and transporting natural gas and NGLs. This segment operates in the Permian Basin in West Texas, the Fort Worth Basin in North Texas, and the onshore region of the Louisiana Gulf Coast. As of December 31, 2009, it owned and operated approximately 6,500 miles of natural gas pipelines and approximately 750 miles of NGL pipelines. The NGL Logistics and Marketing division involves in fractionation, storage, terminalling, transportation, distribution, and marketing of NGLs. It operates in the Mont Belvieu and Galena Park near Houston, Texas; and Lake Charles, Louisiana. Targa Resources GP LLC serves as the general partner of the company. The company was founded in 2006 and is based in Houston, Texas.

ENERGY TRANSFER EQUITY LP (NYSE:ETE) - Energy Transfer Equity, L.P., through its direct and indirect investments in the limited partner and general partner interests in Energy Transfer Partners, L.P., engages in midstream, intrastate, and interstate transportation of natural gas, as well as in storage of natural gas in the United States. The companys Intrastate Transportation and Storage segment engages in the ownership and operation of natural gas transportation pipelines and natural gas storage facilities. As of December 31, 2009, it owned and operated approximately 7,800 miles of natural gas transportation pipelines and 3 natural gas storage facilities. This segment sells natural gas to electric utilities, independent power plants, local distribution companies, industrial end-users, and other marketing companies on the Houston pipeline system. Its Interstate Transportation segment involves owns and operates interstate natural gas pipeline. It owned and operates approximately 2,700 miles of interstate natural gas pipeline with an additional 180 miles under construction. The companys Midstream segment engages in the ownership and operation of in service natural gas gathering pipelines, natural gas processing plants, natural gas treating facilities, and natural gas conditioning facilities. This segment owned and operated approximately 7,000 miles of in service natural gas gathering pipelines, 3 natural gas processing plants, 11 natural gas treating facilities, and 11 natural gas conditioning facilities. Its Retail Propane segment operates a retail distribution network consisting of approximately 440 customer service locations in approximately 40 states. The company was formerly known as La Grange Energy, L.P. Energy Transfer Equity, L.P. was founded in 2002 and is based in Dallas, Texas.

ONEOK PARTNERS LP (NYSE:OKS) - ONEOK Partners, L.P. engages in the gathering, processing, storage, and transportation of natural gas in the United States. The companys Natural Gas Gathering and Processing segment gathers and processes natural gas produced from crude oil and natural gas wells located in the Mid-Continent region; and gathers natural gas in the Williston Basin, which spans portions of Montana and North Dakota, and the Powder River Basin of Wyoming. Its Natural Gas Pipelines segment primarily owns and operates regulated natural gas transmission pipelines, natural gas storage facilities, and natural gas gathering systems for non-processed gas. It also provides interstate natural gas transportation and storage services. This segments interstate natural gas pipeline assets transport natural gas through FERC-regulated interstate natural gas pipelines in North Dakota, Minnesota, Wisconsin, Illinois, Indiana, Kentucky, Tennessee, Oklahoma, Texas, and New Mexico. In addition, it transports intrastate natural gas through its assets in Oklahoma; and owns underground natural gas storage facilities in Oklahoma, Kansas, and Texas. Its Natural Gas Liquids segment gathers, fractionates, and treats natural gas liquids (NGLs), as well as stores NGL products primarily in Oklahoma, Kansas, and Texas. This segment owns FERC-regulated natural gas liquids gathering and distribution pipelines in Oklahoma, Kansas, Texas, Wyoming, and Colorado; terminal and storage facilities in Missouri, Nebraska, Iowa, and Illinois; and FERC-regulated natural gas liquids distribution and refined petroleum products pipelines in Kansas, Missouri, Nebraska, Iowa, Illinois, and Indiana that connect its Mid-Continent assets with Midwest markets, including Chicago, Illinois. ONEOK Partners GP serves as the general partner of the company. It was formerly known as Northern Border Partners, L.P. and changed its name to ONEOK Partners, L.P. in May 2006. The company was founded in 1993 and is based in Tulsa, Oklahoma.

WILLIAMS PARTNERS LP (NYSE:WPZ) - Williams Partners L.P., a diversified master limited partnership, focuses on transporting; gathering, treating, and processing; storing natural gas; and natural gas liquid fractionating and oil transporting activities. The company operates in two segments, Gas Pipeline, and Midstream Gas and Liquids. The Gas Pipeline segment owns and operates approximately 13,900 miles of pipelines with annual throughput of approximately 2,700 trillion British thermal units of natural gas and delivery capacity of approximately 12 million dekatherms of gas. This segment also owns interests in joint venture interstate and intrastate natural gas pipeline systems. The Midstream Gas and Liquids segment operations include natural gas gathering, treating, and processing, as well as oil transportation pipelines that serve the producing basins in Colorado, Wyoming, Pennsylvania, the Gulf Coast, and the Gulf of Mexico. Williams Partners GP LLC serves as the general partner of the company. Williams Partners L.P. was founded in 2005 and is based in Tulsa, Oklahoma.

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