MPLX

MPLX LP

Energy, Event Driven/Special Sit


Presented:06/22/2017
Price:$31.12
Cap:$11.42B
Current Price:$44.09
Cap:$45.00B

Presented

Date06/22/2017
Price$31.12
Market Cap$11.42B
Ent Value$20.87B
P/E Ratio66.75x
Book Value$25.93
Div Yield6.75%
Shares O/S367.00M
Ave Daily Vol1,455,943
Short Int4.89%

Current

Price$44.09
Market Cap$45.00B
MPLX LP is a fee-based, growth-oriented master limited partnership. It is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of natural gas liquids; and the gathering, transportation and storage of crude oil and refined petroleum products. The company operates through two segments: Logistics and Storage & Gathering and Processing. The Logistics and Storage segment includes transportation and storage of crude oil, refined products and other hydrocarbon-based products. The Gathering and Processing segment engages in gathering and processing of natural gas. MPLX was founded in March 27, 2012 and is headquartered in Findlay, OH.,0CMRN2-E

Publicly traded companies mentioned herein: Enterprise Products Partners LP (EPD), Marathon Petroleum Corp (MPC), MPLX LP (MPLX), Williams Partners LP (WPZ)

Highlights

The presenter is long shares of MPLX in the low-$30s ($31-32) and thinks “it is one of the more visible growth stories among MLPs”. The midstream company is the dominant processor in the Marcellus and Utica (~70% of revenue and EBITDA), and the other 30% is a good logistics business. Under pressure from activist investors, MPLX announced the exchange of IDRs (incentive distribution rights) to MPC for MPLX units and an accelerated drop-down plan in early 2017. The move from a “decently complex MLP story” to a more simple one is welcome, and in the presenter’s opinion MPLX is mispriced relative to peers if his pro forma estimate of distributable cash flow in 2019 is accurate at $2.90/ share (a 9% yield on today’s price).

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