Intrinsic value of NGL Energy Partners - NGL

Previous Close

$12.65

  Intrinsic Value

$333.14

stock screener

  Rating & Target

str. buy

+999%

Previous close

$12.65

 
Intrinsic value

$333.14

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of NGL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  10.90
  28.80
  26.42
  24.28
  22.35
  20.62
  19.05
  17.65
  16.38
  15.25
  14.22
  13.30
  12.47
  11.72
  11.05
  10.44
  9.90
  9.41
  8.97
  8.57
  8.22
  7.89
  7.60
  7.34
  7.11
  6.90
  6.71
  6.54
  6.38
  6.25
  6.12
Revenue, $m
  13,022
  16,772
  21,204
  26,351
  32,241
  38,888
  46,297
  54,468
  63,391
  73,055
  83,444
  94,541
  106,329
  118,793
  131,919
  145,698
  160,122
  175,190
  190,903
  207,268
  224,295
  242,000
  260,402
  279,525
  299,397
  320,051
  341,522
  363,850
  387,078
  411,253
  436,426
Variable operating expenses, $m
 
  12,202
  15,387
  19,088
  23,322
  28,099
  33,426
  39,299
  45,714
  52,661
  60,129
  67,961
  76,435
  85,394
  94,830
  104,735
  115,104
  125,935
  137,231
  148,994
  161,234
  173,961
  187,190
  200,936
  215,222
  230,069
  245,503
  261,553
  278,251
  295,629
  313,725
Fixed operating expenses, $m
 
  3,424
  3,509
  3,597
  3,687
  3,779
  3,873
  3,970
  4,069
  4,171
  4,275
  4,382
  4,492
  4,604
  4,719
  4,837
  4,958
  5,082
  5,209
  5,339
  5,473
  5,610
  5,750
  5,894
  6,041
  6,192
  6,347
  6,506
  6,668
  6,835
  7,006
Total operating expenses, $m
  12,761
  15,626
  18,896
  22,685
  27,009
  31,878
  37,299
  43,269
  49,783
  56,832
  64,404
  72,343
  80,927
  89,998
  99,549
  109,572
  120,062
  131,017
  142,440
  154,333
  166,707
  179,571
  192,940
  206,830
  221,263
  236,261
  251,850
  268,059
  284,919
  302,464
  320,731
Operating income, $m
  261
  1,147
  2,307
  3,667
  5,233
  7,009
  8,998
  11,198
  13,608
  16,223
  19,040
  22,198
  25,403
  28,794
  32,370
  36,126
  40,060
  44,173
  48,463
  52,934
  57,588
  62,428
  67,462
  72,695
  78,135
  83,790
  89,672
  95,791
  102,159
  108,789
  115,695
EBITDA, $m
  499
  1,499
  2,714
  4,137
  5,776
  7,634
  9,715
  12,016
  14,536
  17,270
  20,215
  23,365
  26,715
  30,261
  33,999
  37,925
  42,037
  46,335
  50,820
  55,493
  60,357
  65,416
  70,677
  76,146
  81,831
  87,742
  93,889
  100,283
  106,938
  113,866
  121,084
Interest expense (income), $m
  118
  119
  167
  223
  288
  362
  446
  539
  642
  755
  877
  1,008
  1,148
  1,297
  1,454
  1,619
  1,793
  1,975
  2,165
  2,364
  2,570
  2,785
  3,008
  3,240
  3,482
  3,732
  3,993
  4,264
  4,546
  4,839
  5,144
Earnings before tax, $m
  146
  1,028
  2,140
  3,444
  4,945
  6,647
  8,552
  10,659
  12,966
  15,468
  18,163
  21,190
  24,255
  27,498
  30,916
  34,506
  38,267
  42,197
  46,298
  50,570
  55,018
  59,644
  64,454
  69,454
  74,653
  80,058
  85,679
  91,527
  97,613
  103,950
  110,552
Tax expense, $m
  2
  277
  578
  930
  1,335
  1,795
  2,309
  2,878
  3,501
  4,176
  4,904
  5,721
  6,549
  7,424
  8,347
  9,317
  10,332
  11,393
  12,500
  13,654
  14,855
  16,104
  17,403
  18,753
  20,156
  21,616
  23,133
  24,712
  26,356
  28,067
  29,849
Net income, $m
  137
  750
  1,563
  2,514
  3,610
  4,853
  6,243
  7,781
  9,465
  11,292
  13,259
  15,469
  17,706
  20,073
  22,569
  25,190
  27,935
  30,804
  33,797
  36,916
  40,163
  43,540
  47,051
  50,702
  54,497
  58,442
  62,546
  66,815
  71,258
  75,884
  80,703

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  12
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  6,320
  8,126
  10,273
  12,767
  15,621
  18,841
  22,431
  26,389
  30,713
  35,395
  40,428
  45,805
  51,516
  57,555
  63,914
  70,590
  77,579
  84,879
  92,492
  100,420
  108,670
  117,248
  126,164
  135,429
  145,057
  155,064
  165,466
  176,284
  187,538
  199,251
  211,447
Adjusted assets (=assets-cash), $m
  6,308
  8,126
  10,273
  12,767
  15,621
  18,841
  22,431
  26,389
  30,713
  35,395
  40,428
  45,805
  51,516
  57,555
  63,914
  70,590
  77,579
  84,879
  92,492
  100,420
  108,670
  117,248
  126,164
  135,429
  145,057
  155,064
  165,466
  176,284
  187,538
  199,251
  211,447
Revenue / Adjusted assets
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
  2.064
Average production assets, $m
  2,877
  3,707
  4,686
  5,824
  7,125
  8,594
  10,232
  12,037
  14,009
  16,145
  18,441
  20,894
  23,499
  26,253
  29,154
  32,199
  35,387
  38,717
  42,190
  45,806
  49,569
  53,482
  57,549
  61,775
  66,167
  70,731
  75,476
  80,411
  85,544
  90,887
  96,450
Working capital, $m
  545
  721
  912
  1,133
  1,386
  1,672
  1,991
  2,342
  2,726
  3,141
  3,588
  4,065
  4,572
  5,108
  5,673
  6,265
  6,885
  7,533
  8,209
  8,913
  9,645
  10,406
  11,197
  12,020
  12,874
  13,762
  14,685
  15,646
  16,644
  17,684
  18,766
Total debt, $m
  2,993
  4,167
  5,565
  7,188
  9,046
  11,142
  13,479
  16,056
  18,871
  21,919
  25,196
  28,696
  32,414
  36,345
  40,485
  44,831
  49,381
  54,133
  59,089
  64,251
  69,621
  75,205
  81,009
  87,041
  93,309
  99,823
  106,595
  113,638
  120,964
  128,589
  136,529
Total liabilities, $m
  4,116
  5,290
  6,688
  8,311
  10,169
  12,265
  14,602
  17,179
  19,994
  23,042
  26,319
  29,819
  33,537
  37,468
  41,608
  45,954
  50,504
  55,256
  60,212
  65,374
  70,744
  76,328
  82,132
  88,164
  94,432
  100,946
  107,718
  114,761
  122,087
  129,712
  137,652
Total equity, $m
  2,204
  2,836
  3,585
  4,456
  5,452
  6,575
  7,828
  9,210
  10,719
  12,353
  14,110
  15,986
  17,979
  20,087
  22,306
  24,636
  27,075
  29,623
  32,280
  35,047
  37,926
  40,920
  44,031
  47,265
  50,625
  54,117
  57,748
  61,523
  65,451
  69,538
  73,795
Total liabilities and equity, $m
  6,320
  8,126
  10,273
  12,767
  15,621
  18,840
  22,430
  26,389
  30,713
  35,395
  40,429
  45,805
  51,516
  57,555
  63,914
  70,590
  77,579
  84,879
  92,492
  100,421
  108,670
  117,248
  126,163
  135,429
  145,057
  155,063
  165,466
  176,284
  187,538
  199,250
  211,447
Debt-to-equity ratio
  1.358
  1.470
  1.550
  1.610
  1.660
  1.690
  1.720
  1.740
  1.760
  1.770
  1.790
  1.800
  1.800
  1.810
  1.810
  1.820
  1.820
  1.830
  1.830
  1.830
  1.840
  1.840
  1.840
  1.840
  1.840
  1.840
  1.850
  1.850
  1.850
  1.850
  1.850
Adjusted equity ratio
  0.347
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  137
  750
  1,563
  2,514
  3,610
  4,853
  6,243
  7,781
  9,465
  11,292
  13,259
  15,469
  17,706
  20,073
  22,569
  25,190
  27,935
  30,804
  33,797
  36,916
  40,163
  43,540
  47,051
  50,702
  54,497
  58,442
  62,546
  66,815
  71,258
  75,884
  80,703
Depreciation, amort., depletion, $m
  238
  352
  407
  471
  543
  625
  717
  818
  928
  1,047
  1,175
  1,167
  1,313
  1,467
  1,629
  1,799
  1,977
  2,163
  2,357
  2,559
  2,769
  2,988
  3,215
  3,451
  3,696
  3,951
  4,217
  4,492
  4,779
  5,077
  5,388
Funds from operations, $m
  -312
  1,102
  1,969
  2,985
  4,153
  5,478
  6,960
  8,599
  10,393
  12,339
  14,434
  16,636
  19,019
  21,540
  24,197
  26,988
  29,912
  32,967
  36,154
  39,475
  42,932
  46,528
  50,266
  54,153
  58,193
  62,394
  66,762
  71,307
  76,037
  80,961
  86,091
Change in working capital, $m
  -285
  161
  191
  221
  253
  286
  319
  351
  384
  416
  447
  477
  507
  536
  564
  592
  620
  648
  676
  704
  732
  761
  791
  822
  855
  888
  923
  960
  999
  1,040
  1,082
Cash from operations, $m
  -27
  941
  1,779
  2,763
  3,900
  5,192
  6,641
  8,247
  10,009
  11,923
  13,988
  16,159
  18,512
  21,004
  23,633
  26,396
  29,292
  32,319
  35,479
  38,772
  42,200
  45,766
  49,475
  53,330
  57,339
  61,506
  65,839
  70,347
  75,038
  79,922
  85,009
Maintenance CAPEX, $m
  0
  -161
  -207
  -262
  -325
  -398
  -480
  -572
  -672
  -783
  -902
  -1,030
  -1,167
  -1,313
  -1,467
  -1,629
  -1,799
  -1,977
  -2,163
  -2,357
  -2,559
  -2,769
  -2,988
  -3,215
  -3,451
  -3,696
  -3,951
  -4,217
  -4,492
  -4,779
  -5,077
New CAPEX, $m
  -364
  -830
  -979
  -1,138
  -1,302
  -1,469
  -1,637
  -1,806
  -1,972
  -2,136
  -2,296
  -2,452
  -2,605
  -2,754
  -2,901
  -3,045
  -3,188
  -3,330
  -3,473
  -3,617
  -3,763
  -3,913
  -4,067
  -4,226
  -4,392
  -4,564
  -4,745
  -4,934
  -5,133
  -5,343
  -5,563
Cash from investing activities, $m
  -363
  -991
  -1,186
  -1,400
  -1,627
  -1,867
  -2,117
  -2,378
  -2,644
  -2,919
  -3,198
  -3,482
  -3,772
  -4,067
  -4,368
  -4,674
  -4,987
  -5,307
  -5,636
  -5,974
  -6,322
  -6,682
  -7,055
  -7,441
  -7,843
  -8,260
  -8,696
  -9,151
  -9,625
  -10,122
  -10,640
Free cash flow, $m
  -390
  -50
  593
  1,364
  2,273
  3,325
  4,524
  5,870
  7,364
  9,005
  10,790
  12,676
  14,739
  16,937
  19,265
  21,722
  24,305
  27,012
  29,843
  32,798
  35,878
  39,084
  42,420
  45,889
  49,496
  53,245
  57,143
  61,196
  65,412
  69,800
  74,368
Issuance/(repayment) of debt, $m
  70
  1,186
  1,398
  1,624
  1,858
  2,096
  2,337
  2,577
  2,815
  3,048
  3,277
  3,500
  3,718
  3,931
  4,140
  4,346
  4,550
  4,752
  4,956
  5,162
  5,370
  5,584
  5,804
  6,032
  6,268
  6,514
  6,772
  7,042
  7,326
  7,625
  7,940
Issuance/(repurchase) of shares, $m
  287
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  556
  1,186
  1,398
  1,624
  1,858
  2,096
  2,337
  2,577
  2,815
  3,048
  3,277
  3,500
  3,718
  3,931
  4,140
  4,346
  4,550
  4,752
  4,956
  5,162
  5,370
  5,584
  5,804
  6,032
  6,268
  6,514
  6,772
  7,042
  7,326
  7,625
  7,940
Total cash flow (excl. dividends), $m
  166
  1,136
  1,990
  2,988
  4,131
  5,421
  6,861
  8,447
  10,179
  12,053
  14,066
  16,176
  18,457
  20,868
  23,406
  26,068
  28,854
  31,765
  34,799
  37,960
  41,248
  44,669
  48,224
  51,921
  55,764
  59,759
  63,915
  68,238
  72,739
  77,425
  82,308
Retained Cash Flow (-), $m
  -548
  -632
  -749
  -870
  -996
  -1,124
  -1,253
  -1,382
  -1,509
  -1,634
  -1,757
  -1,876
  -1,993
  -2,107
  -2,219
  -2,330
  -2,439
  -2,548
  -2,657
  -2,767
  -2,879
  -2,994
  -3,112
  -3,234
  -3,360
  -3,492
  -3,631
  -3,775
  -3,928
  -4,088
  -4,256
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  504
  1,241
  2,117
  3,135
  4,298
  5,608
  7,066
  8,670
  10,419
  12,310
  14,300
  16,464
  18,761
  21,186
  23,738
  26,415
  29,217
  32,142
  35,193
  38,369
  41,675
  45,113
  48,687
  52,403
  56,267
  60,284
  64,463
  68,811
  73,337
  78,051
Discount rate, %
 
  9.70
  10.19
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.38
  29.79
  31.28
  32.85
  34.49
  36.21
  38.03
  39.93
PV of cash for distribution, $m
 
  460
  1,022
  1,561
  2,048
  2,462
  2,784
  3,004
  3,115
  3,121
  3,030
  2,848
  2,610
  2,326
  2,017
  1,702
  1,398
  1,116
  866
  653
  478
  340
  234
  156
  100
  62
  37
  22
  12
  6
  3
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

NGL Energy Partners LP owns and operates a vertically integrated energy business. The Company's segments are crude oil logistics, water solutions, liquids, retail propane, refined products and renewables, and corporate and other. Its crude oil logistics segment includes owned and leased crude oil storage terminals, and owned and leased pipeline injection stations. Its water solutions segment provides services for the treatment and disposal of wastewater generated from crude oil and natural gas production, and for the disposal of solids, such as tank bottoms and drilling fluids. Its liquids segment supplies natural gas liquids to retailers, wholesalers, refiners and petrochemical plants throughout the United States and in Canada. Its retail propane segment consists of the retail marketing, and sale and distribution of propane and distillates, among others. The Company's refined products and renewables segment is engaged in gasoline, diesel, ethanol and biodiesel marketing operations.

FINANCIAL RATIOS  of  NGL Energy Partners (NGL)

Valuation Ratios
P/E Ratio 11.1
Price to Sales 0.1
Price to Book 0.7
Price to Tangible Book
Price to Cash Flow -56.3
Price to Free Cash Flow -3.9
Growth Rates
Sales Growth Rate 10.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -45%
Cap. Spend. - 3 Yr. Gr. Rate 17.1%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 134.4%
Total Debt to Equity 135.8%
Interest Coverage 2
Management Effectiveness
Return On Assets 4.3%
Ret/ On Assets - 3 Yr. Avg. 1.8%
Return On Total Capital 2.8%
Ret/ On T. Cap. - 3 Yr. Avg. -0.2%
Return On Equity 7.1%
Return On Equity - 3 Yr. Avg. -0.5%
Asset Turnover 2.2
Profitability Ratios
Gross Margin 3.6%
Gross Margin - 3 Yr. Avg. 4.4%
EBITDA Margin 3.9%
EBITDA Margin - 3 Yr. Avg. 2.5%
Operating Margin 2%
Oper. Margin - 3 Yr. Avg. 0.6%
Pre-Tax Margin 1.1%
Pre-Tax Margin - 3 Yr. Avg. -0.1%
Net Profit Margin 1.1%
Net Profit Margin - 3 Yr. Avg. -0.1%
Effective Tax Rate 1.4%
Eff/ Tax Rate - 3 Yr. Avg. -1.7%
Payout Ratio 132.8%

NGL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NGL stock intrinsic value calculation we used $13022 million for the last fiscal year's total revenue generated by NGL Energy Partners. The default revenue input number comes from 2017 income statement of NGL Energy Partners. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NGL stock valuation model: a) initial revenue growth rate of 28.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 9.7%, whose default value for NGL is calculated based on our internal credit rating of NGL Energy Partners, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of NGL Energy Partners.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NGL stock the variable cost ratio is equal to 73%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $3340 million in the base year in the intrinsic value calculation for NGL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4% for NGL Energy Partners.

Corporate tax rate of 27% is the nominal tax rate for NGL Energy Partners. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NGL stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NGL are equal to 22.1%.

Life of production assets of 17.9 years is the average useful life of capital assets used in NGL Energy Partners operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NGL is equal to 4.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2204 million for NGL Energy Partners - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 118.861 million for NGL Energy Partners is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of NGL Energy Partners at the current share price and the inputted number of shares is $1.5 billion.

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COMPANY NEWS

▶ NGL Energy Partners Announces Quarterly Cash Distribution   [Jan-23-18 08:49PM  Business Wire]
▶ Energy Stocks Outperformed Oil and the Broader Market   [Dec-12-17 10:32AM  Market Realist]
▶ The Top MLP Gainers as of December 8   [07:33AM  Market Realist]
▶ Alerian Index Series December 2017 Index Review   [Dec-08-17 08:30AM  PR Newswire]
▶ Top MLP Gainers for Week Ended November 10   [05:05PM  Market Realist]
▶ These Five Midstream MLPs Offer Highest Yield   [Sep-21-17 04:06PM  Market Realist]
▶ Can NGL Energy Partners Gain Upward Momentum?   [Sep-18-17 02:36PM  Market Realist]
▶ These MLPs Rose More than 6% Last Week   [01:00PM  Market Realist]
▶ Alerian Index Series September 2017 Index Review   [Sep-08-17 08:30AM  PR Newswire]
▶ Top MLPs Losers Last Week, Ended September 1   [Sep-05-17 12:01PM  Market Realist]
▶ NGL Energy Partners Hit With Quant Downgrade, Weak Charts   [Aug-16-17 04:00PM  TheStreet.com]
▶ These MLPs Fell More than 5% Last Week   [Aug-08-17 12:28PM  Market Realist]
▶ These Energy Stocks Fell the Most Last Week   [11:36AM  Market Realist]
▶ Which Segment Could Drive Williams Partners Q2 Performance   [Jul-28-17 07:40AM  Market Realist]
▶ Who Were the Top Energy Losers Last Week?   [Jul-25-17 08:12AM  Market Realist]
▶ NGL Energy Partners Announces Quarterly Cash Distribution   [Jul-20-17 07:40PM  Business Wire]
▶ Stay Away! 5 Dividend Stocks That Are Yield Traps   [Jul-13-17 11:30AM  Motley Fool]
▶ NGL Energy Hits New Year-to-Date Lows: Key for Investors   [Jun-23-17 09:09AM  Market Realist]
▶ Which MLP Stocks Were the Biggest Losers in April 2017?   [May-05-17 04:34PM  Market Realist]
▶ Which Segment Will Drive Williams Partners 1Q17 Performance?   [Apr-28-17 04:05PM  Market Realist]
▶ Midstream Stocks Returns and Implied Volatilities   [Apr-27-17 03:06PM  Market Realist]
▶ Implied Volatility in Midstream: Inside the Latest Returns   [Mar-14-17 01:05PM  Market Realist]
▶ MLPs Issue Equity; Tailwind or Headwind for Sector?   [Mar-03-17 04:13PM  at Barrons.com]
▶ Midstream Stocks: How Returns Impact Implied Volatility   [Feb-28-17 11:05AM  Market Realist]
Financial statements of NGL
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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