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MWE, APL, KMP, KMR, ETE, OKS, Oil and Gas - Pipeline Stocks Overvalued

^{Published on 2011-08-30 06:51:20 - 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. MARKWEST ENERGY PARTNERS LP (NYSE:MWE), ATLAS PIPELINE PARTNERS LP (NYSE:APL), KINDER MORGAN ENERGY PRTNRS (NYSE:KMP), KINDER MORGAN MANAGEMENT LLC (NYSE:KMR), ENERGY TRANSFER EQUITY LP (NYSE:ETE), ONEOK PARTNERS LP (NYSE:OKS) 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               
     MWE        MARKWEST ENERGY PARTNERS LP         46.33          42.05          10.20% Overvalued           Oil and Gas - Pipeline 
     APL        ATLAS PIPELINE PARTNERS LP          29.85          27.54          8.40% Overvalued            Oil and Gas - Pipeline 
     KMP        KINDER MORGAN ENERGY PRTNRS         69.1           65.34          5.80% Overvalued            Oil and Gas - Pipeline 
     KMR        KINDER MORGAN MANAGEMENT LLC        59.8           58.36          2.50% 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 

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.

MARKWEST ENERGY PARTNERS LP (NYSE:MWE) - MarkWest Energy Partners, L.P., together with its subsidiaries, engages in the gathering, processing, and transportation of natural gas in the United States. The company also transports, fractionates, storages, and markets natural gas liquids; and gathers and transports crude oil. It conducts its operations in the Southwest, the Northeast, Liberty, and the Gulf Coast. MarkWest Energy GP, L.L.C. serves as the general partner of the company. MarkWest Energy Partners, L.P. was founded in 1988 and is based in Denver, Colorado.

ATLAS PIPELINE PARTNERS LP (NYSE:APL) - Atlas Pipeline Partners, L.P., through its subsidiaries, engages in gathering and processing natural gas. It provides natural gas gathering services in the Anadarko and Permian Basins located in the southwestern and mid-continent United States; and the Appalachian Basin in the eastern United States. The company owns and operates 8 natural gas processing plants with an aggregate capacity of approximately 900 million cubic feet per day and 1 treating facility with a capacity of approximately 200 million cubic feet per day. These facilities are connected to approximately 9,100 miles of active natural gas gathering systems located in Oklahoma, Kansas, and Texas, which gather gas from wells and central delivery points to the companys natural gas processing and treating plants, as well as third-party pipelines. In addition, it owns and operates approximately 1,800 miles of natural gas gathering systems in the Appalachian Basin located in the northeastern United States, as well as approximately 80 miles of active natural gas gathering pipelines located in northeastern Tennessee. Atlas Pipeline Partners GP, LLC serves as the general partner of the company. Atlas Pipeline Partners was founded in 1999 and is based in Moon Township, Pennsylvania.

KINDER MORGAN ENERGY PRTNRS (NYSE:KMP) - Kinder Morgan Energy Partners, L.P. owns and manages energy transportation and storage assets. Its Products Pipelines segment delivers gasoline, diesel fuel, jet fuel, and natural gas liquids to various markets through approximately 8,400 miles of refined petroleum products pipelines, and 60 associated product terminals and petroleum pipeline transmix processing facilities. The companys Natural Gas Pipelines segment gathers, transports, stores, processes, and sells natural gas through approximately 15,500 miles of natural gas transmission pipelines and gathering lines, as well as natural gas storage, treating, and processing facilities. Its CO2 segment produces and transports carbon dioxide through approximately 2,000 miles of pipelines to oil fields that use carbon dioxide to increase production of oil. It also owns and operates 8 oil fields, and a 450 mile crude oil pipeline system in west Texas. The companys Terminals segment transloads, stores, and delivers bulk, petroleum, petrochemical, and other liquids products through approximately 124 liquid and bulk terminal facilities; and approximately 33 rail transloading and materials handling facilities. Its Kinder Morgan Canada segment transports crude oil and refined petroleum products through approximately 2,500 miles of pipelines from Alberta, Canada to marketing terminals and refineries in British Columbia, the state of Washington, and the Rocky Mountains, as well as in the central regions of the United States. This segment also owns and operates a 25-mile aviation turbine fuel pipeline that serves the Vancouver International Airport. Kinder Morgan G.P., Inc. serves as the general partner of the company. It operates primarily in the United States, Canada, and Mexico. The company was founded in 1992 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.

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.

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