Toolatetrader asked "would not the law suite have anything to do with its poor stock price?"
But the FERC problems were announced in August [?] of last year - and I am comparing the price performance since the first of this year. An efficient market would have priced this risk into the stock before the beginning of the measurement period. But . . of course . . the market is NOT efficient.
It is the popular myth [and by myth I mean an 'explanation' more than falsehood] that there are two kinds of markets - the market of fear and the market of greed. And it is my perception that we are currently in a market of Fear, Uncertainty and Ddoubt. The FERC issues raise ETP's FUD factor. So old news is probably having a current effect on unit price appreciation.
The original question was to compare the price performance of ETP to ETE - and I had hard stats on that. Trying to pin the tale on the FERC factor in ETP's current pricing, that is a donkey of a different color - the stats are soft and fuzzy.
I show ETP's price/DCF based on 2009 consensus DCF estimates at 9.44 while the midstream sector average was at 10.53 [based on prices at close of 6-10]. ETP's LTM distribution growth has been 10.32% - which is right at sector average. The May ending five year forward CAGR estimate for ETP was 8.8 - which is a bit above average.
So I would say ETP is selling at close to a 10% discount based on those metrics [meaning the price/DCF ratio should logically be 10 and not 9]. As of close of business 6-10, ETP's unit price was down 12.79% YTD while the non-cap weight midstream [ex-shippers] MLPs in my coverage universe was down 6.23%. On any given day, a 3% difference is only noise caused by shifts in unit holder supply and demand. So that leaves the other three percentage points of under-performance due to the FERC issue. And that would make 7 percentage points [or to be consistent with the noise discount - the other four percentage points] of ETP's current under-valuation priced into ETP during 2007. Both my mind and my gut like that conclusion.
Do not let the mathematical preciseness of the above estimates fool you - I know the above contained a fair amount of BS - or we could politely call them uncertain estimates from an unqualified source.
But I am guessing that the rest of the market is making the same kind of guesstimates - and the rest of the market is equally unqualified.
In hindsight, I almost with I had not attempted to answer toolatetreader's question. But I wanted to be generous and attempt an answer. There are days when I am 'kinder' than I am wise - and this day was one of those. [grin]