WPZ

Williams Partners LP

Energy, Event Driven/Special Sit


Presented:04/25/2016
Price:$28.35
Cap:$16.66B
Current Price:$47.37
Cap:$45.39B

Presented

Date04/25/2016
Price$28.35
Market Cap$16.66B
Ent Value$40.22B
P/E RatioN/A
Book Value$33.70
Div Yield0.12%
Shares O/S587.58M
Ave Daily Vol3,474,086
Short Int4.04%

Current

Price$47.37
Market Cap$45.39B
Williams Partners LP owns, operates, develops and acquires natural gas, natural gas liquids and oil gathering systems and other midstream energy assets. It provides gathering, treating and compression services. The company was founded in January 2010 and is headquartered in Oklahoma City, OK.

Publicly traded companies mentioned herein: Energy Transfer Equity LP (ETE), Huntsman Corporation (HUN), Sunoco LP (SUN), Williams Companies (WMB), Williams Partners LP (WPZ)

Highlights

The presenter is bullish on Williams Partners (WPZ) at this time (~$28 and a 12% yield), and also sees value in the corporate debt [i.e., the 2044 issue and the 2045(s), which are trading at roughly 84 and 80, respectively]. He said, “We began looking at the situation with WPZ at the beginning of 2016, and established the long position(s) in the first quarter due”. Generally speaking, Williams’ assets are all “between very good and ok”, with the value of the Transco pipeline covering the entire debt stack. He does not think the ETE / WMB deal will go through, and said the termination of the deal would likely result in a breakup fee in the $2 - $3 billion range being paid to WPZ. This would allow WPZ to delever (from 4.5x), avoid issues/ risk with its credit rating, and trade to a ~9% yield. In this scenario, the price objective is in the high $30s, possibly $40.

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Idea Discussion

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