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Inergy, L.P. Message Board

  • jessathan2 jessathan2 Dec 10, 2005 9:53 AM Flag

    analyst comments

    Despite the benefits of the recently announced spree of accretive
    acquisitions and consistent bumps in the distribution payment, NRGY has lagged other comparable growth profile MLPs by a
    healthy margin. Although we have been frustrated watching the weakness in NRGY�s unit price, it is significant to highlight
    distribution growth prospects remain intact and unit prices follow the path of the distribution payment in the longer-term basis,
    despite the short-term turbulence. Based on all valuation metrics (absolute yield, yield spread relative to the 10 Year Treasury
    rate, MLP index and comparable growth profile partnerships, coupled with models that factor in growth rates, such as
    distribution growth models and forecasted free cash flow yields in 2006), NRGY is currently trading at an attractive, steep
    discount valuation level. As such, we believe the weakness creates an attractive entry point for patient investors given the
    compelling risk/reward proposition at the current valuation level.