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info:mlp_enchilata_part_one [2008/06/09 03:00] – tomgeeinfo:mlp_enchilata_part_one [2008/06/09 04:52] (current) – tomgee
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 {{info:mlp_part4.jpg|}} {{info:mlp_part4.jpg|}}
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 +
  
 ==== Enchilada part five ==== ==== Enchilada part five ====
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 Enchilada part seven - the very long explanation Enchilada part seven - the very long explanation
-The Whole enchilada part seven - a fictionalized narrative and an introduction to rocket science+==== The Whole enchilada part seven ==== 
 +  
 +- a fictionalized narrative and an introduction to rocket science
  
 The other day my neighbor dropped by to ask questions about some of the spreadsheets I had posted on the IV board, and on other spreadsheets done by the brokerages or done by me and not recently shared with the good folks at IV. And he was complaining that 'there are just too many dang numbers. There is [1] EPS - and [2] the trend in EPS growth. There is [3] DCF [distributable cash flow] estimates and [4] DCF growth trends. There are [5] CAGRs - and some of those CAGRs look kinda flakey. There are [6] distributions and [7] trends in distribution growth." [And we will temporarily ignore some of the other numbers he listed - like ratings and target prices.] "It's sort of like juggling every time I have to make an investment decision. And just like juggling, I can handle two balls and sometimes three - but when you get to that fourth ball - the balls (or in this case the spreadsheets) start going every which way - and I just get flustered. And that is just with analyzing ONE MLP. When you start to compare two MLP’s against each other - that adds up to fourteen dang balls in the air at once. There has got to be a simpler way!" The other day my neighbor dropped by to ask questions about some of the spreadsheets I had posted on the IV board, and on other spreadsheets done by the brokerages or done by me and not recently shared with the good folks at IV. And he was complaining that 'there are just too many dang numbers. There is [1] EPS - and [2] the trend in EPS growth. There is [3] DCF [distributable cash flow] estimates and [4] DCF growth trends. There are [5] CAGRs - and some of those CAGRs look kinda flakey. There are [6] distributions and [7] trends in distribution growth." [And we will temporarily ignore some of the other numbers he listed - like ratings and target prices.] "It's sort of like juggling every time I have to make an investment decision. And just like juggling, I can handle two balls and sometimes three - but when you get to that fourth ball - the balls (or in this case the spreadsheets) start going every which way - and I just get flustered. And that is just with analyzing ONE MLP. When you start to compare two MLP’s against each other - that adds up to fourteen dang balls in the air at once. There has got to be a simpler way!"
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 The following companies had logical P/E valuations that were more than 10% above the 2006 beginning price: BPL, BWP, CPNO, ETP, HLND, MMP, OKS, PAA, SXL, TCLP and MMLP. Their mean price gain for the year is 35.86%. Their mean total return for the year is 43.28% - and 7 of the 11 beat the sector average yearly price gain [23.14%]. The following companies had logical P/E valuations that were more than 10% above the 2006 beginning price: BPL, BWP, CPNO, ETP, HLND, MMP, OKS, PAA, SXL, TCLP and MMLP. Their mean price gain for the year is 35.86%. Their mean total return for the year is 43.28% - and 7 of the 11 beat the sector average yearly price gain [23.14%].
-   The following companies had logical P/E valuations of less than 10% above the 2006 beginning price: APL, EEP, EPD, HEP, KMP, MWE, RGNC, TLP, TPP, VLI, WPZ, XTEX, KSP, TGP and USS. Their mean price gain for the year is 13.82%. Their mean total return for the year is 20.76% - and 3 of the 15 beat the sector average yearly price gain.+ 
 +The following companies had logical P/E valuations of less than 10% above the 2006 beginning price: APL, EEP, EPD, HEP, KMP, MWE, RGNC, TLP, TPP, VLI, WPZ, XTEX, KSP, TGP and USS. Their mean price gain for the year is 13.82%. Their mean total return for the year is 20.76% - and 3 of the 15 beat the sector average yearly price gain.
  
 So choosing from the 'menu' of the highly discounted MLPs netted an average total return that was TWICE the sector average return. I would call that pretty dang predictive. He asked if I had the numbers on the DCFs. I did - and I showed them those. He asked if I had the numbers on the DDM model. I did - and I showed them those. I then explained that I also calculated a four model average - and number that combines the valuations for the EPS model, the CAGR model, the DDM model, plus the current price, and so one has a single number to compare to the current price to see if there is a discount. It is logical that if each of the predictive models is in fact predictive, then it is logical that the average of those four models would also be predictive. So choosing from the 'menu' of the highly discounted MLPs netted an average total return that was TWICE the sector average return. I would call that pretty dang predictive. He asked if I had the numbers on the DCFs. I did - and I showed them those. He asked if I had the numbers on the DDM model. I did - and I showed them those. I then explained that I also calculated a four model average - and number that combines the valuations for the EPS model, the CAGR model, the DDM model, plus the current price, and so one has a single number to compare to the current price to see if there is a discount. It is logical that if each of the predictive models is in fact predictive, then it is logical that the average of those four models would also be predictive.
info/mlp_enchilata_part_one.1212994802.txt.gz · Last modified: 2008/06/09 03:00 by tomgee