ETE

Energy Transfer Equity LP

Energy


Presented:03/14/2018
Price:$15.16
Cap:$17.46B
Current Price:$16.37
Cap:$56.19B

Presented

Date03/14/2018
Price$15.16
Market Cap$17.46B
Ent Value$95.24B
P/E Ratio17.68x
Book ValueN/A
Div Yield8.05%
Shares O/S1,151.50M
Ave Daily Vol6,183,040
Short Int6.05%

Current

Price$16.37
Market Cap$56.19B
Energy Transfer Equity LP provides natural gas pipeline transportation and transmission services. It operates through following segments: Investment in ETP, Investment in Sunoco LP, Investment in Lake Charles LNG, and Corporate and Other. The Investment in ETP segment engages in the gathering and processing, compression, treating and transportation of natural gas, focusing on providing midstream services in some of the most prolific natural gas producing regions in the United States, including the Eagle Ford, Haynesville, Barnett, Fayetteville, Marcellus, Utica, Bone Spring and Avalon shales. The Investment in Sunoco LP segment engaged in the wholesale distribution of motor fuels to convenience stores, independent dealers, commercial customers, and distributors, as well as the retail sale of motor fuels and merchandise through Sunoco LP operated convenience stores and retail fuel sites. The Investment in Lake Charles LNG segment engaged in interstate commerce and is subject to the rules, regulations and accounting requirements of the FERC. The Corporate and Other segment engages in the activities of the parent company. Energy Transfer Equity LP was founded in September 2002 and is headquartered in Dallas, TX.

Publicly traded companies mentioned herein: Energy Transfer Equity LP (ETE), Energy Transfer Partners LP (ETP), Kinder Morgan Inc (KMI)

Highlights

The presenter is long shares of Energy Transfer Equity (ETE) and Energy Transfer Partners (ETP), although he prefers ETE if he could only own one of the two securities. The situation has been volatile YTD, with the price falling from ~$18 to $13 - $14 recently. He looks at ETE on an EBITDA multiple basis, and believes it is undervalued after making the appropriate adjustments to cash flows (i.e., assuming maintenance capex is 75% of depreciation). At ~10x his 2019 EBITDA forecast, he sees 50% upside potential over 12 - 24 months (including the 10% yield).

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Idea Discussion

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