Intrinsic value of Plains GP Holdings - PAGP

Previous Close

$21.53

  Intrinsic Value

$33.11

stock screener

  Rating & Target

str. buy

+54%

Previous close

$21.53

 
Intrinsic value

$33.11

 
Up/down potential

+54%

 
Rating

str. buy

We calculate the intrinsic value of PAGP 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
2016(a)
   2017
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -12.83
  13.60
  12.74
  11.97
  11.27
  10.64
  10.08
  9.57
  9.11
  8.70
  8.33
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.59
  6.43
  6.29
  6.16
  6.05
  5.94
  5.85
  5.76
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
Revenue, $m
  20,182
  22,927
  25,848
  28,941
  32,202
  35,629
  39,220
  42,973
  46,890
  50,970
  55,217
  59,633
  64,224
  68,995
  73,953
  79,106
  84,462
  90,031
  95,824
  101,852
  108,128
  114,665
  121,477
  128,580
  135,989
  143,721
  151,795
  160,228
  169,040
  178,253
  187,888
Variable operating expenses, $m
 
  20,831
  23,456
  26,234
  29,164
  32,243
  35,469
  38,841
  42,359
  46,025
  49,840
  53,574
  57,698
  61,985
  66,439
  71,068
  75,880
  80,883
  86,087
  91,503
  97,141
  103,013
  109,133
  115,514
  122,170
  129,117
  136,370
  143,946
  151,864
  160,140
  168,796
Fixed operating expenses, $m
 
  873
  895
  918
  940
  964
  988
  1,013
  1,038
  1,064
  1,091
  1,118
  1,146
  1,174
  1,204
  1,234
  1,265
  1,296
  1,329
  1,362
  1,396
  1,431
  1,467
  1,503
  1,541
  1,580
  1,619
  1,660
  1,701
  1,744
  1,787
Total operating expenses, $m
  19,192
  21,704
  24,351
  27,152
  30,104
  33,207
  36,457
  39,854
  43,397
  47,089
  50,931
  54,692
  58,844
  63,159
  67,643
  72,302
  77,145
  82,179
  87,416
  92,865
  98,537
  104,444
  110,600
  117,017
  123,711
  130,697
  137,989
  145,606
  153,565
  161,884
  170,583
Operating income, $m
  990
  1,222
  1,497
  1,789
  2,097
  2,422
  2,763
  3,120
  3,492
  3,881
  4,286
  4,942
  5,380
  5,836
  6,311
  6,804
  7,318
  7,852
  8,408
  8,988
  9,591
  10,221
  10,877
  11,562
  12,277
  13,025
  13,805
  14,622
  15,476
  16,370
  17,305
EBITDA, $m
  1,485
  2,019
  2,365
  2,733
  3,122
  3,531
  3,959
  4,408
  4,877
  5,366
  5,875
  6,405
  6,956
  7,529
  8,125
  8,745
  9,390
  10,061
  10,759
  11,486
  12,244
  13,034
  13,857
  14,717
  15,614
  16,551
  17,529
  18,553
  19,623
  20,743
  21,915
Interest expense (income), $m
  462
  446
  537
  667
  805
  951
  1,105
  1,265
  1,433
  1,608
  1,790
  1,980
  2,178
  2,383
  2,596
  2,818
  3,049
  3,288
  3,537
  3,796
  4,066
  4,346
  4,639
  4,943
  5,261
  5,592
  5,938
  6,299
  6,676
  7,070
  7,482
Earnings before tax, $m
  738
  776
  960
  1,122
  1,292
  1,471
  1,658
  1,854
  2,059
  2,273
  2,495
  2,961
  3,202
  3,453
  3,714
  3,986
  4,269
  4,564
  4,871
  5,192
  5,526
  5,874
  6,239
  6,619
  7,017
  7,433
  7,868
  8,323
  8,800
  9,300
  9,823
Tax expense, $m
  78
  209
  259
  303
  349
  397
  448
  501
  556
  614
  674
  800
  865
  932
  1,003
  1,076
  1,153
  1,232
  1,315
  1,402
  1,492
  1,586
  1,684
  1,787
  1,895
  2,007
  2,124
  2,247
  2,376
  2,511
  2,652
Net income, $m
  94
  566
  701
  819
  943
  1,074
  1,211
  1,354
  1,503
  1,659
  1,822
  2,162
  2,338
  2,521
  2,712
  2,910
  3,117
  3,332
  3,556
  3,790
  4,034
  4,288
  4,554
  4,832
  5,122
  5,426
  5,743
  6,076
  6,424
  6,789
  7,171

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  394
  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
  26,103
  29,206
  32,927
  36,867
  41,022
  45,387
  49,962
  54,743
  59,732
  64,930
  70,340
  75,966
  81,814
  87,892
  94,208
  100,772
  107,595
  114,689
  122,069
  129,748
  137,743
  146,070
  154,748
  163,796
  173,234
  183,084
  193,369
  204,112
  215,338
  227,074
  239,348
Adjusted assets (=assets-cash), $m
  25,709
  29,206
  32,927
  36,867
  41,022
  45,387
  49,962
  54,743
  59,732
  64,930
  70,340
  75,966
  81,814
  87,892
  94,208
  100,772
  107,595
  114,689
  122,069
  129,748
  137,743
  146,070
  154,748
  163,796
  173,234
  183,084
  193,369
  204,112
  215,338
  227,074
  239,348
Revenue / Adjusted assets
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
Average production assets, $m
  14,851
  16,874
  19,024
  21,300
  23,701
  26,223
  28,866
  31,628
  34,511
  37,514
  40,639
  43,890
  47,269
  50,781
  54,430
  58,222
  62,164
  66,263
  70,526
  74,963
  79,582
  84,393
  89,407
  94,635
  100,088
  105,779
  111,721
  117,928
  124,414
  131,194
  138,286
Working capital, $m
  -391
  1,055
  1,189
  1,331
  1,481
  1,639
  1,804
  1,977
  2,157
  2,345
  2,540
  2,743
  2,954
  3,174
  3,402
  3,639
  3,885
  4,141
  4,408
  4,685
  4,974
  5,275
  5,588
  5,915
  6,255
  6,611
  6,983
  7,370
  7,776
  8,200
  8,643
Total debt, $m
  11,839
  13,758
  17,107
  20,653
  24,392
  28,322
  32,438
  36,742
  41,232
  45,910
  50,779
  55,842
  61,106
  66,576
  72,260
  78,168
  84,309
  90,694
  97,335
  104,246
  111,441
  118,936
  126,746
  134,889
  143,384
  152,249
  161,505
  171,174
  181,277
  191,840
  202,886
Total liabilities, $m
  24,366
  26,285
  29,634
  33,180
  36,919
  40,849
  44,965
  49,269
  53,759
  58,437
  63,306
  68,369
  73,633
  79,103
  84,787
  90,695
  96,836
  103,221
  109,862
  116,773
  123,968
  131,463
  139,273
  147,416
  155,911
  164,776
  174,032
  183,701
  193,804
  204,367
  215,413
Total equity, $m
  1,737
  2,921
  3,293
  3,687
  4,102
  4,539
  4,996
  5,474
  5,973
  6,493
  7,034
  7,597
  8,181
  8,789
  9,421
  10,077
  10,760
  11,469
  12,207
  12,975
  13,774
  14,607
  15,475
  16,380
  17,323
  18,308
  19,337
  20,411
  21,534
  22,707
  23,935
Total liabilities and equity, $m
  26,103
  29,206
  32,927
  36,867
  41,021
  45,388
  49,961
  54,743
  59,732
  64,930
  70,340
  75,966
  81,814
  87,892
  94,208
  100,772
  107,596
  114,690
  122,069
  129,748
  137,742
  146,070
  154,748
  163,796
  173,234
  183,084
  193,369
  204,112
  215,338
  227,074
  239,348
Debt-to-equity ratio
  6.816
  4.710
  5.200
  5.600
  5.950
  6.240
  6.490
  6.710
  6.900
  7.070
  7.220
  7.350
  7.470
  7.570
  7.670
  7.760
  7.840
  7.910
  7.970
  8.030
  8.090
  8.140
  8.190
  8.240
  8.280
  8.320
  8.350
  8.390
  8.420
  8.450
  8.480
Adjusted equity ratio
  0.052
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  94
  566
  701
  819
  943
  1,074
  1,211
  1,354
  1,503
  1,659
  1,822
  2,162
  2,338
  2,521
  2,712
  2,910
  3,117
  3,332
  3,556
  3,790
  4,034
  4,288
  4,554
  4,832
  5,122
  5,426
  5,743
  6,076
  6,424
  6,789
  7,171
Depreciation, amort., depletion, $m
  495
  797
  869
  944
  1,024
  1,108
  1,197
  1,289
  1,385
  1,485
  1,589
  1,463
  1,576
  1,693
  1,814
  1,941
  2,072
  2,209
  2,351
  2,499
  2,653
  2,813
  2,980
  3,154
  3,336
  3,526
  3,724
  3,931
  4,147
  4,373
  4,610
Funds from operations, $m
  440
  1,363
  1,570
  1,763
  1,967
  2,182
  2,407
  2,642
  2,888
  3,144
  3,411
  3,625
  3,913
  4,214
  4,526
  4,851
  5,189
  5,540
  5,907
  6,289
  6,686
  7,101
  7,534
  7,986
  8,458
  8,952
  9,467
  10,007
  10,571
  11,162
  11,780
Change in working capital, $m
  -271
  126
  134
  142
  150
  158
  165
  173
  180
  188
  195
  203
  211
  219
  228
  237
  246
  256
  266
  277
  289
  301
  313
  327
  341
  356
  371
  388
  405
  424
  443
Cash from operations, $m
  711
  1,237
  1,435
  1,621
  1,817
  2,025
  2,242
  2,470
  2,708
  2,956
  3,215
  3,422
  3,702
  3,994
  4,298
  4,614
  4,942
  5,284
  5,640
  6,011
  6,398
  6,801
  7,221
  7,660
  8,118
  8,596
  9,096
  9,619
  10,166
  10,738
  11,337
Maintenance CAPEX, $m
  0
  -495
  -562
  -634
  -710
  -790
  -874
  -962
  -1,054
  -1,150
  -1,250
  -1,355
  -1,463
  -1,576
  -1,693
  -1,814
  -1,941
  -2,072
  -2,209
  -2,351
  -2,499
  -2,653
  -2,813
  -2,980
  -3,154
  -3,336
  -3,526
  -3,724
  -3,931
  -4,147
  -4,373
New CAPEX, $m
  -1,334
  -2,023
  -2,150
  -2,276
  -2,400
  -2,522
  -2,643
  -2,763
  -2,882
  -3,003
  -3,126
  -3,251
  -3,379
  -3,512
  -3,649
  -3,792
  -3,942
  -4,099
  -4,264
  -4,437
  -4,619
  -4,811
  -5,014
  -5,228
  -5,453
  -5,691
  -5,942
  -6,207
  -6,486
  -6,781
  -7,091
Cash from investing activities, $m
  -1,273
  -2,518
  -2,712
  -2,910
  -3,110
  -3,312
  -3,517
  -3,725
  -3,936
  -4,153
  -4,376
  -4,606
  -4,842
  -5,088
  -5,342
  -5,606
  -5,883
  -6,171
  -6,473
  -6,788
  -7,118
  -7,464
  -7,827
  -8,208
  -8,607
  -9,027
  -9,468
  -9,931
  -10,417
  -10,928
  -11,464
Free cash flow, $m
  -562
  -1,281
  -1,277
  -1,290
  -1,293
  -1,288
  -1,275
  -1,255
  -1,229
  -1,197
  -1,161
  -1,184
  -1,140
  -1,093
  -1,044
  -993
  -940
  -887
  -832
  -776
  -720
  -663
  -606
  -548
  -490
  -431
  -372
  -312
  -251
  -190
  -127
Issuance/(repayment) of debt, $m
  -103
  2,313
  3,349
  3,546
  3,739
  3,929
  4,117
  4,303
  4,490
  4,678
  4,869
  5,064
  5,264
  5,470
  5,684
  5,907
  6,141
  6,385
  6,641
  6,911
  7,195
  7,495
  7,810
  8,143
  8,494
  8,865
  9,256
  9,669
  10,104
  10,562
  11,046
Issuance/(repurchase) of shares, $m
  2,365
  617
  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  
  812
  2,930
  3,349
  3,546
  3,739
  3,929
  4,117
  4,303
  4,490
  4,678
  4,869
  5,064
  5,264
  5,470
  5,684
  5,907
  6,141
  6,385
  6,641
  6,911
  7,195
  7,495
  7,810
  8,143
  8,494
  8,865
  9,256
  9,669
  10,104
  10,562
  11,046
Total cash flow (excl. dividends), $m
  254
  1,650
  2,072
  2,256
  2,446
  2,641
  2,842
  3,048
  3,261
  3,481
  3,708
  3,880
  4,124
  4,377
  4,640
  4,914
  5,200
  5,498
  5,810
  6,135
  6,475
  6,831
  7,204
  7,595
  8,005
  8,434
  8,884
  9,357
  9,852
  10,373
  10,919
Retained Cash Flow (-), $m
  25
  -1,184
  -372
  -394
  -415
  -437
  -457
  -478
  -499
  -520
  -541
  -563
  -585
  -608
  -632
  -656
  -682
  -709
  -738
  -768
  -799
  -833
  -868
  -905
  -944
  -985
  -1,028
  -1,074
  -1,123
  -1,174
  -1,227
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
 
  466
  1,700
  1,862
  2,031
  2,205
  2,384
  2,570
  2,762
  2,961
  3,167
  3,317
  3,539
  3,769
  4,009
  4,258
  4,518
  4,789
  5,072
  5,367
  5,676
  5,999
  6,337
  6,690
  7,061
  7,449
  7,856
  8,282
  8,730
  9,199
  9,692
Discount rate, %
 
  12.80
  13.44
  14.11
  14.82
  15.56
  16.34
  17.15
  18.01
  18.91
  19.86
  20.85
  21.89
  22.99
  24.14
  25.34
  26.61
  27.94
  29.34
  30.80
  32.34
  33.96
  35.66
  37.44
  39.32
  41.28
  43.35
  45.51
  47.79
  50.18
  52.69
PV of cash for distribution, $m
 
  413
  1,321
  1,253
  1,169
  1,070
  962
  849
  734
  623
  518
  413
  329
  256
  194
  144
  104
  73
  49
  33
  21
  13
  8
  4
  2
  1
  1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0

Plains GP Holdings, L.P. owns and operates midstream energy infrastructure and provides logistics services for crude oil, natural gas liquids (NGL), natural gas and refined products. The Company operates through three segments: Transportation, Facilities, and Supply and Logistics. Through its three business segments, the Company is engaged in the transportation, storage, terminaling and marketing of crude oil, NGL and natural gas. The Transportation segment operations consist of fee-based activities associated with transporting crude oil and NGL on pipelines, gathering systems, trucks and barges. The Facilities segment operations consist of fee-based activities associated with providing storage, terminaling and throughput services for crude oil, refined products, NGL and natural gas, as well as NGL fractionation and isomerization services and natural gas and condensate processing services. The Supply and Logistics segment operations consist of the merchant-related activities.

FINANCIAL RATIOS  of  Plains GP Holdings (PAGP)

Valuation Ratios
P/E Ratio 23.2
Price to Sales 0.1
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 3.1
Price to Free Cash Flow -3.5
Growth Rates
Sales Growth Rate -12.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -35.8%
Cap. Spend. - 3 Yr. Gr. Rate -3.7%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 582.8%
Total Debt to Equity 681.6%
Interest Coverage 3
Management Effectiveness
Return On Assets 2%
Ret/ On Assets - 3 Yr. Avg. 1.8%
Return On Total Capital 0.7%
Ret/ On T. Cap. - 3 Yr. Avg. 0.8%
Return On Equity 5.4%
Return On Equity - 3 Yr. Avg. 5.8%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 14.6%
Gross Margin - 3 Yr. Avg. 12.8%
EBITDA Margin 8.4%
EBITDA Margin - 3 Yr. Avg. 7.2%
Operating Margin 4.9%
Oper. Margin - 3 Yr. Avg. 4.8%
Pre-Tax Margin 3.7%
Pre-Tax Margin - 3 Yr. Avg. 3.8%
Net Profit Margin 0.5%
Net Profit Margin - 3 Yr. Avg. 0.4%
Effective Tax Rate 10.6%
Eff/ Tax Rate - 3 Yr. Avg. 14.2%
Payout Ratio 248.9%

PAGP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PAGP stock intrinsic value calculation we used $20182 million for the last fiscal year's total revenue generated by Plains GP Holdings. The default revenue input number comes from 2016 income statement of Plains GP Holdings. 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 PAGP stock valuation model: a) initial revenue growth rate of 13.6% 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 12.8%, whose default value for PAGP is calculated based on our internal credit rating of Plains GP Holdings, 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 Plains GP Holdings.
    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 PAGP stock the variable cost ratio is equal to 91%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $852 million in the base year in the intrinsic value calculation for PAGP 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 3.9% for Plains GP Holdings.

Corporate tax rate of 27% is the nominal tax rate for Plains GP Holdings. 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 PAGP 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 PAGP are equal to 73.6%.

Life of production assets of 34.8 years is the average useful life of capital assets used in Plains GP Holdings 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 PAGP is equal to 4.6%. 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 - $1737 million for Plains GP Holdings - 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 290.205 million for Plains GP Holdings 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 Plains GP Holdings at the current share price and the inputted number of shares is $6.2 billion.

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COMPANY NEWS

▶ Barclays Downgrades Plains All American Pipeline   [Jan-25-18 02:45PM  Market Realist]
▶ Barclays Downgraded 9 MLPs Last Week   [01:14PM  Market Realist]
▶ Energy Transfer Equity Is Underperforming AMLP in 2018   [Jan-12-18 10:27AM  Market Realist]
▶ Institutional Investors and ETE, PAGP, WGP, and WMB   [Dec-19-17 09:01AM  Market Realist]
▶ No matter how high crude oil goes, it will fall hard back below $50   [Nov-22-17 10:42AM  Yahoo Finance Video]
▶ Crude oil is overextended and won't go much higher: NYSE trader   [Nov-21-17 01:32PM  Yahoo Finance Video]
▶ Rising crude prices are bring US shale rigs back on line   [Nov-20-17 11:05AM  Yahoo Finance Video]
▶ Plains GP misses 3Q profit forecasts   [Nov-06-17 04:58PM  Associated Press]
▶ A Look at Plains GP Holdings Correlation with Crude Oil   [Oct-12-17 07:40AM  Market Realist]
▶ The 10 MLPs Most Correlated with Crude Oil   [Oct-11-17 05:48PM  Market Realist]
▶ Why Williams Companies Is Outperforming Peers in 2017   [Sep-20-17 01:37PM  Market Realist]
▶ Plains GP misses 2Q profit forecasts   [12:01AM  Associated Press]
▶ ETE, PAGP, WGP, and ENLC: How Do Their Valuations Compare?   [May-31-17 07:37AM  Market Realist]
▶ Why PAGP Has the Highest Distribution Yield among Its Peers   [May-30-17 09:06AM  Market Realist]
▶ ETE, PAGP, WGP, and ENLC: Analyzing MLPs General Partners   [May-29-17 02:47PM  Market Realist]
▶ Plains GP misses 1Q profit forecasts   [May-08-17 05:48PM  Associated Press]
▶ [$$] Tortoise Wins the Race   [Mar-04-17 12:01AM  at Barrons.com]
▶ MLPs Issue Equity; Tailwind or Headwind for Sector?   [Mar-03-17 04:13PM  at Barrons.com]
▶ Insider Invests in Plains GP Holdings   [10:43AM  GuruFocus.com]
▶ PAGP Completes Public Offering of Class A Shares   [Mar-01-17 04:06PM  Business Wire]
▶ PAGP Prices Upsized Public Offering of Class A Shares   [Feb-23-17 09:55PM  Business Wire]
Financial statements of PAGP
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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