BIP
Brookfield Infrastructure Partners LP
Industrial/Transportation, Energy
04/11/2017
Presented
| Date | 04/06/2017 |
| Price | $38.07 |
| Market Cap | $9.47B |
| Ent Value | $20.75B |
| P/E Ratio | 33.99x |
| Book Value | $17.77 |
| Div Yield | 0.05% |
| Shares O/S | 248.70M |
| Ave Daily Vol | 334,350 |
| Short Int | N/A |
Current
| Price | $34.15 |
| Market Cap | $15.77B |
| Brookfield Infrastructure Partners LP owns and operates global infrastructure assets that generates cash flows and requires minimal capital expenditures. Its business is carried out through the following segments: Utilities, Transport, Energy, and Communications Infrastructure. The Utilities segment refers to the regulated businesses such as regulated terminal, electricity transmission, and regulated distribution. The Transport segment include, rail, toll roads, and ports that provide transportation, storage, and handling services for freight, bulk commodities, and passengers through road, toll roads, and ports. The Energy segment deals with district energy, and transmission, distribution, and storage operations. The Communications Infrastructure segment provides services and infrastructure to the media and telecom sector such as tower infrastructure operations. The company was founded in July 1905 and is headquartered in Hamilton, Bermuda. |
Publicly traded companies mentioned herein: Abertis Infraestructuras SA (ABE SM), Brookfield Asset Management Inc (BAM; BAM/A CN), Brookfield Infrastructure Partners LP (BIP), Kinder Morgan (KMI), Peabody Energy Corp (BTU)
Highlights
Brookfield Infrastructure Partners LP (BIP) is a member of the Brookfield Asset Management (BAM) family (BAM owns 30% of BIP). The presenter believes BAM, the Toronto-based global asset manager - has some fundamental problems, but its complex structure may insulate it from some of the issues he sees echoed in BIP. At this time he is short shares of BIP, and at $38 he thinks the risk/ reward is attractive. BIP is a NYSE-listed limited partnership structure that is incorporated in Bermuda, and because it is a Brookfield affiliated entity and has a 4.5% yield, it is heavily owned by the Canadian pension funds. Additionally, BIP is highly acquisitive and “generates huge M&A-related fees for Bay Street and BAM (over $100mm in underwriting for all of its deals, he added)”. However, aggressive accounting, a disconnect between the value of assets as reported by BIP compared to its investment partners, an apparent funding gap between actual cash flow and the dividend, and capex requirements for many of its assets lead the presenter to believe that BIP is overvalued. He views it as “more of an investment fund” that should trade at either book value or a discount to the value of the assets in its portfolio (versus just over 2x book value today).
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