PSXP

Phillips 66 Partners LP

Energy


Presented:04/25/2016
Price:$59.41
Cap:$4.90B
Current Price:$42.01
Cap:$9.56B

Presented

Date04/25/2016
Price$59.41
Market Cap$4.90B
Ent Value$5.46B
P/E Ratio31.5x
Book Value$12.61
Div Yield0.03%
Shares O/S82.49M
Ave Daily Vol438,212
Short Int12.39%

Current

Price$42.01
Market Cap$9.56B
Phillips 66 Partners LP is a growth-oriented, traditional master limited partnership. The company was formed to own, operate, develop and acquire primarily fee-based crude oil, refined petroleum product and natural gas liquids pipelines and terminals and other transportation and midstream assets. Its initial assets consist of crude oil and refined petroleum product pipeline, terminal and storage systems in the Central and Gulf Coast regions of the U.S. The company was founded on February 20, 2013 and is headquartered in Houston, TX.

Publicly traded companies mentioned herein: Consolidated Edison Inc (ED), Crestwood Equity Partners LP (CEQP), EQT Midstream Partners LP (EQM), Phillips 66 (PSX), Phillips 66 Partners LP (PSXP)

Highlights

With shares of Phillips 66 Partners (PSXP) trading at ~$62 per unit and just below a 3% yield, the presenter sees a favorable risk/ reward and entry point for a short position. The 3% yield may be as low as it can go given a large financing backlog, as the incremental investor is likely to require a higher yield. The company is presently in a quiet period, and reports on April 29, 2016. Trailing 12 month EBITDA amounts to roughly $250 million and the presenter said dropdowns are expected to boost this figure to $450 million in 2016, and $550 - $600 million in 2017. Coverage also increased in Q4 to 1.44x and leverage decreased slightly to 3.8x EBITDA. Despite these positives, the stock has not moved much over the past two months as the sector has traded higher on a recovery in Crude Oil; he believes this is a sign that there is very limited further upside potential for PSXP stock.

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Idea Discussion

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