

NGLS, WPZ, EPD, ACC, BOWFF, EDR, Oil and Gas - Pipeline Stocks Overvalued
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. TARGA RESOURCES PARTNERS LP (NYSE:NGLS), WILLIAMS PARTNERS LP (NYSE:WPZ), ENTERPRISE PRODUCTS PARTNERS (NYSE:EPD), AMERICAN CAMPUS COMMUNITIES (NYSE:ACC), BOARDWALK REAL ESTATE INVEST (OTC:BOWFF), EDUCATION REALTY TRUST INC (NYSE:EDR) 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 NGLS TARGA RESOURCES PARTNERS LP 33.9 30.73 10.30% Overvalued Oil and Gas - Pipeline WPZ WILLIAMS PARTNERS LP 52.99 44.69 18.60% Overvalued Oil and Gas - Pipeline EPD ENTERPRISE PRODUCTS PARTNERS 41.3 33.79 22.20% Overvalued Oil and Gas - Pipeline ACC AMERICAN CAMPUS COMMUNITIES 38.53 38.03 1.30% Overvalued REIT - Residential BOWFF BOARDWALK REAL ESTATE INVEST 51.7325 50.82 1.80% Overvalued REIT - Residential EDR EDUCATION REALTY TRUST INC 8.89 6.56 35.50% Overvalued REIT - Residential
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.
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.
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.
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.
AMERICAN CAMPUS COMMUNITIES (NYSE:ACC) - American Campus Communities, Inc. (ACC), a real estate investment trust (REIT), engages in the acquisition, design, finance, development, lease, and management of student housing properties in the United States. As of July 12, 2005, the company owned and managed 25 student housing properties, containing approximately 16,300 beds, as well as managed 44 student housing properties, representing 27,600 beds. ACC also provides construction management and development services for student housing properties owned by colleges and universities, charitable foundations, and others. In addition, it also provides third party property management and leasing services. The company has elected to be taxed as a REIT under sections 856 to 860 of the Internal Revenue Code. As a REIT, it would not be subject to federal income tax purposes, provided it distributes at least 90% of taxable income to its shareholders. ACC was founded in 1993 and is based in Austin, Texas.
BOARDWALK REAL ESTATE INVEST (OTC:BOWFF) - Boardwalk Real Estate Investment Trust engages in the acquisition, refurbishment, management, and ownership of multi-family residential communities in Canada. As of January 7, 2010, the company had approximately 260 properties with 36,418 units totaling approximately 31 million net rentable square feet in the provinces of Alberta, British Columbia, Saskatchewan, Ontario, and Quebec. Boardwalk Real Estate Investment Trust was founded in 1993 and is headquartered in Calgary, Canada.
EDUCATION REALTY TRUST INC (NYSE:EDR) - Education Realty Trust, Inc., a real estate investment trust (REIT), develops, acquires, owns, and manages student housing communities located near university campuses in the United States. It also provides third-party management services, including residence life and student development, marketing, leasing administration, strategic relationships, information systems, and accounting services for student housing communities owned by educational institutions and charitable foundations. In addition, the company offers third-party development consulting services, such as market analysis and evaluation of housing needs and options; co-operation with university in architectural design; negotiation of ground lease, development agreement, construction contract, architectural contract, and bond documents; oversight of architectural design process; co-ordination of governmental and university plan approvals; oversight of construction process; design, purchase, and installation of furniture; pre-opening marketing to students; and obtaining final approvals of construction. It provides its third-party development consulting services primarily to universities seeking to modernize their on-campus student housing communities, as well as to other third-party investors. As of December 31, 2009, the company owned 40 student housing communities located in 19 states containing 25,454 beds in 7,813 apartment units located near 35 universities. It also provided third-party management services for 20 student housing communities located in 9 states containing 10,186 beds in 3,272 apartment units at 16 universities. The company qualifies as a REIT for federal income tax purposes. As a REIT, it would not be subject to federal corporate income tax if it distributes at least 90% of its REIT taxable income to its stockholders. The company was founded in 1964 and is based in Memphis, Tennessee.
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