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SUN, SYNM, AE, GLP, EROC, Oil Refining and Marketing Stocks Overvalued

^{Published on 2012-01-04 06:40:20 - WOPRAI}
 

January 4, 2012/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Oil Refining and Marketing sector and these stocks are the most undervalued as of today. SUNOCO INC (NYSE:SUN), SYNTROLEUM CORP (NASDAQ:SYNM), ADAMS RESOURCES & ENERGY INC (AMEX:AE), GLOBAL PARTNERS LP (NYSE:GLP), EAGLE ROCK ENERGY PARTNERS (NASDAQ:EROC) 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               
     SUN        SUNOCO INC                          $40.88         $37.51         8.20% Overvalued            Oil Refining and Marketing
     SYNM       SYNTROLEUM CORP                     $0.99          $0.12          87.90% Overvalued           Oil Refining and Marketing
     AE         ADAMS RESOURCES & ENERGY INC        $29.51         $26.30         10.90% Overvalued           Oil Refining and Marketing
     GLP        GLOBAL PARTNERS LP                  $22.50         $18.47         17.90% Overvalued           Oil Refining and Marketing
     EROC       EAGLE ROCK ENERGY PARTNERS          $11.48         $9.65          15.90% Overvalued           Oil Refining and Marketing

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.

SUNOCO INC (NYSE:SUN) - Sunoco, Inc., through its subsidiaries, manufactures and markets various petroleum, commodity, and intermediate petrochemicals products in the United States. It operates in five segments: Refining and Supply, Retail Marketing, Chemicals, Logistics, and Coke. The Refining and Supply segment manufactures and sells petroleum products, including gasoline; middle distillates, such as jet fuel, heating oil, and diesel fuel; and residual fuel oil, as well as commodity petrochemicals, including refinery-grade propylene, benzene, cumene, toluene, and xylene to wholesale and industrial customers. The Retail Marketing segment engages in the retail sale of gasoline and middle distillates, as well as the operation of a network of 4,711 retail outlets in 23 states, primarily on the East Coast and in the Midwest region of the United States. The Chemicals segment manufactures, distributes, and markets commodity and intermediate petrochemicals, which include aromatic derivatives comprising phenol, acetone, bisphenol-A, and other phenol derivatives; and polypropylene. The Logistics segment operates refined product and crude oil pipelines and terminals, and conducts crude oil acquisition and marketing activities primarily in the northeast, midwest and south central regions of the United States. It also owns interest in various refined product and crude oil pipeline joint ventures. As of December 31, 2009, the company owned and operated approximately 3,850 miles of crude oil pipelines and approximately 2,200 miles of refined product pipelines. The Coke segment owns and operates metallurgical coke plants and metallurgical coal mines, and manufactures metallurgical coke for use in the steel industry. Sunoco was founded in 1886 and is based in Philadelphia, Pennsylvania.

SYNTROLEUM CORP (NASDAQ:SYNM) - Syntroleum Corporation and its subsidiaries engage in the commercialization and licensing of Syntroleum technologies to produce synthetic liquid hydrocarbons. It owns the Syntroleum Process technology for the conversion of carbon containing material into synthesis gas; and conversion of synthesis gas or coal-derived or biomass derived syngas into hydrocarbons. The company also owns the Synfining Process technology for the conversion of Fischer-Tropsch wax into various products, including diesel fuels, heating oil, jet fuels, lubricants, naphtha, and other materials; and the Bio-Synfining technology to process a range of feedstocks, including vegetable oils, fats, fatty acids, and greases into synthetic distillate fuels, such as diesel fuel, heating oil, jet fuel, naphtha, and propane. In addition, Syntroleum Corporation, through a joint venture with Tyson Foods, Inc., constructs and operates renewable synthetic fuel facilities. Further, the company focuses on military grade fuels development. Syntroleum Corporation was founded in 1996 and is based in Tulsa, Oklahoma.

ADAMS RESOURCES & ENERGY INC (AMEX:AE) - Adams Resources & Energy, Inc., together with its subsidiaries, engages in marketing crude oil, natural gas, and petroleum products. It purchases crude oil, and arranges sales and deliveries to refiners and other customers in Texas and Louisiana with additional operations in Michigan and New Mexico; purchases, distributes, and markets natural gas; and offers value added services by providing access to common carrier pipelines and handling daily volume balancing requirements, as well as risk management services. The company also markets branded and unbranded refined petroleum products, such as motor fuels comprising automotive gasoline, biodiesel, and conventional diesel fuel; and lubricants consisting of passenger car motor oils, and industrial oils and greases. In addition, it involves in railroad servicing industry by fueling and lubricating locomotives, as well as performing routine maintenance on the power units; and operates as a direct-to-vessel marine fuel and lube vendor primarily in Texas Gulf Coast and southern Louisiana. Further, the company transports liquid chemicals on a for hire basis in the continental United States and Canada, as well as engages in the exploration and development of domestic oil and natural gas properties primarily in Texas and the south central region of the United States. Adams Resources & Energy, Inc. was founded in 1973 and is headquartered in Houston, Texas.

GLOBAL PARTNERS LP (NYSE:GLP) - Global Partners LP, through its subsidiaries, engages in the wholesale and commercial distribution of refined petroleum products and natural gas, and provides ancillary services in the United States and internationally. It operates in two segments, Wholesale and Commercial. The Wholesale segment sells gasoline, home heating oil, diesel, kerosene, and residual oil to unbranded retail gasoline stations and other resellers of transportation fuels, home heating oil retailers, and wholesale distributors. The Commercial segment sells unbranded gasoline, home heating oil, diesel, kerosene, and residual oil to the public sector, and commercial and industrial customers. This segment also purchases, custom blends, sells, and delivers bunker fuel and diesel to cruise ships, bulk carriers, and fishing fleets generally by barges. It serves federal and state agencies, municipalities, and industrial companies; autonomous authorities, such as transportation authorities and water resource authorities, colleges, and universities; and a group of small utilities. As of December 31, 2009, the company owned, leased, or maintained storage facilities at 22 refined petroleum product bulk terminals with the capacity of approximately 50,000 barrels. Global GP LLC serves as the general partner of the company. Global Partners LP is based in Waltham, Massachusetts.

EAGLE ROCK ENERGY PARTNERS (NASDAQ:EROC) - Eagle Rock Energy Partners, L.P., together with its subsidiaries, engages in gathering, compressing, treating, processing, transporting, and selling natural gas, as well as in fractionating and transporting natural gas liquids (NGL). It also involves in acquiring, developing, and producing oil and natural gas working interests in Alabama and Texas; and acquiring and managing fee minerals and royalty interests. The company has natural gas gathering and processing assets in Texas Panhandle, east Texas/Louisiana, south Texas, west Texas, and the Gulf of Mexico. The Texas Panhandle operations include East Panhandle System and West Panhandle System. The East Panhandle System consists of approximately 1,100 miles of natural gas gathering pipelines; and 4 natural gas processing plants. The West Panhandle System has approximately 2,643 miles of natural gas gathering pipelines; 3 natural gas processing plants; 1 propane fractionation facility; and 1 condensate collection facility. The east Texas/Louisiana activities include approximately 1,195 miles of natural gas gathering pipelines; 2 cryogenic processing plants; 5 JT/refrigeration processing plants; and a 19-mile NGL pipeline. The south Texas operations consist of approximately 266 miles of natural gas pipeline; a compressor stations; and 3 processing stations. The Gulf of Mexico activities include approximately 40 miles of natural gas gathering pipelines; 2 cryogenic processing plants; and a NGL fractionator. Eagle Rock Energy GP, L.P. serves as the general partner of Eagle Rock Energy Partners, L.P. The company was founded in 2002 and is based in Houston, Texas. Eagle Rock Energy Partners, L.P. operates as a subsidiary of Eagle Rock Holdings, L.P.

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