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EPD, MMP, BPL, MWE, APL, KMP, Oil and Gas Production - MLP Stocks Overvalued

^{Published on 2011-09-16 06:40:32 - WOPRAI}
 

September 16, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Oil and Gas Production - MLP sector and these stocks are the most undervalued as of today. ENTERPRISE PRODUCTS PARTNERS (NYSE:EPD), MAGELLAN MIDSTREAM PARTNERS (NYSE:MMP), BUCKEYE PARTNERS LP (NYSE:BPL), MARKWEST ENERGY PARTNERS LP (NYSE:MWE), ATLAS PIPELINE PARTNERS LP (NYSE:APL), KINDER MORGAN ENERGY PRTNRS (NYSE:KMP) 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        $41.82         $33.94         23.20% Overvalued           Oil and Gas Production - MLP
     MMP        MAGELLAN MIDSTREAM PARTNERS         $59.82         $57.65         3.80% Overvalued            Oil and Gas Production - MLP
     BPL        BUCKEYE PARTNERS LP                 $63.56         $51.90         22.50% Overvalued           Oil and Gas Production - MLP
     MWE        MARKWEST ENERGY PARTNERS LP         $48.05         $41.34         16.20% Overvalued           Oil and Gas Production - MLP
     APL        ATLAS PIPELINE PARTNERS LP          $32.40         $28.33         14.40% Overvalued           Oil and Gas Production - MLP
     KMP        KINDER MORGAN ENERGY PRTNRS         $69.71         $68.30         2.10% Overvalued            Oil and Gas Production - MLP

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.

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.

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.

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.

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