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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (46902)	3/6/2012 1:05:11 AM
From: Spekulatius	Read Replies (3) \| Respond to of 78627

DPM - theis MLP seems expensive by just about any metric I can think of - EV/EBITDA, P/B etc.While a lot of their cash flows are fee based, one has to worry about the long term impact of the extremely low gas prices on their gathering operations as well.

To: Paul Senior who wrote (46902)	3/6/2012 1:10:14 PM
From: E_K_S	Read Replies (1) \| Respond to of 78627

Hi Paul - Not quite sure what the best way to determine the "value" for these MLP's. You can not use PE or dividend yield. Clownbuck suggests that EV/EBITDA is a good measure but compared to what? I am holding these MLP's mainly for their distributions so their ability to generate cash flows are important to me. For example, CMCSA (Comcast) is a non MLP and is known for their huge cash floows they generate. If you compare the MLP's cash flows to CMCSA, they are not that good. CMCSA has a relatively high PE at 19 and their dividend is not that good at 2.2% but they generate $4.61 cash flow per share. EV.EBITA for CMCSA is 6.27. According to my StreetSmartEdge Research profile for DPM, their cash flow per share is $4.06 only 62% of what CMCSA generates when adjusted on an equivalent share price basis. The positives are that EPS growth at 85% is very good and the 5.5% dividend yield is much better than CMCSA and above my 4% criteria. So, for me it comes down to where these MLP pipeline and gathering systems are located, what their capacity is and if there are long term growth prospects in the regions they service. Since the supply of both Oil & NG continues to be increased from all the new drilling in the U.S. domestic shale, many if not all of these MLP's should see continued sustained growth IMO. Probably better sustained growth than COMCAST expects to get through new subscribers. So for me, it's the growth story that makes me continue to hold. Perhaps the only long term negative I can see is if the tax law preferential treatment for MLP's change. This could impact their profitability. However, at some point these MLP's are expensive. Would it be if the Market price divided by the Cash Flow/share exceeds 10 AND the dividend distribution is less than 5%. For DPM it is 11.3 and 5.5% yield (but remember 85% EPS growth). So maybe it's on the border of being over valued even for me. EKS

To: Paul Senior who wrote (46902)	9/3/2012 11:46:17 PM
From: E_K_S	Respond to of 78627

Re: DCP Midstream Partners Company ramping up infrastructure for natural gas Friday, August 31, 2012 \| Updated: Sunday, September 2, 2012 11:28pm DCP Midstream Partners - a Denver-based master limited partnership that's a joint venture of Houston's Phillips 66 and Spectra Energy - is building its business around the belief that the geography of the natural gas boom will require new processing and transporting capacity. DCP Midstream is zeroing in on natural gas liquids, byproducts of the abundant gas.The Association of Oil Pipelines has estimated that the Eagle Ford Shale, Permian basin and other plays will create demand for an additional 500 miles per year of new natural gas liquid pipelines over the next 25 years."We decided we probably should be looking harder at owning more natural gas liquids infrastructure and more natural gas liquids pipelines," O'Connor said, describing DCP's strategy to position itself as the premier one-stop services company to get natural gas liquids from the well to customers."We are on the front end of this energy revolution," O'Connor said.DCP Midstream's operations dot shale plays in Texas, Oklahoma, Colorado and Kansas, where its processing plants remove water and natural gas liquids from gas, sending the remaining dry gas to pipelines and the liquids into a path called the Y-stream.The Y-stream feeds fractionators, which separate natural gas liquids into components including the fuels propane and butane and the petrochemical building block ethane. In the last couple of years, DCP has set about building infrastructure to pick up gas at the wellhead and transport natural gas liquids to market centers on the Gulf Coast.Its customers include Anadarko, Noble Energy, PDC Energy and other big natural gas exploration interests.It has begun converting two pipelines to transport natural gas liquids to Mont Belvieu, a gas storage and processing center east of Houston. O'Connor said demand from petrochemical and fractionation plants has pushed natural gas liquids prices higher there than at another major liquids hub in Conway, Kan.When complete, the 900-mile Southern Hills line will connect Mont Belvieu with various points in the Midwest, and the 720-mile Sand Hills Pipeline will link to the Permian Basin in West Texas and the Eagle Ford Shale in South Texas.In July, DCP Midstream spent $200 million for minority interests in two Mont Belvieu fractionators that can process 55,000 to 60,000 barrels of liquids per day. --------------------------------------------------------------------------------------------------------- My last buy on this one was 2/3/2010 at $30.22 for the IRA. The company continues to raise a lot of capital to funds its projects. DCP Midstream Partners, LP Announces Pricing of Common Unit Offering Friday, 2 Mar 2012 08:55am EST DCP Midstream Partners, LP announced that it has priced an underwritten public offering of 4,750,000 common units representing limited partner interests at $47.42 per common unit. DCP Midstream Partners LP Agrees To Issue $177.4 Million Of Common Units Monday, 25 Jun 2012 04:39pm EDT DCP Midstream Partners LP announced it has entered into an agreement with a group of institutional investors led by funds managed by ClearBridge Advisors, FAMCO MLP, a division of Advisory Research, Inc., Kayne Anderson Capital Advisors and Tortoise Capital Advisors to sell $177.4 million of the Partnership’s common units in a private placement at a price of $35.55 per unit. The Stock is trading at $43.14/share. Maybe another drop in the $38.00 price might present a buying opportunity. The private placement "buy" appears to have gotten a bargain at $35.55/share. Maybe SE and/or PSX may be better "value" side bets as they hold large interests in DPM. I sold my SE at $28.00 4/2012 as the PE topped 17 and their dividend dropped below 4%. Maybe a sell off in SE below $27 could pose a good entry point if one is bullish on the growth in domestic NG. EKS