With the fluctuation in the markets and the price of oil it is more important than ever to focus on the fundamentals, but what to look for? Well we a company and some of the reasons it could be a good investment. When making decisions here are a few things we consider important before your final decision.
We are going to look at Energy transfer partners (NYSE:ETP) today. We will examine it from a fundamental and technical perspective. In general, investors should select a company based on its quarterly earnings growth rates, profitability margins, payout ratio, quarterly revenue growth rates, current ratio, etc. in contrast to focusing only on the yield. Before taking a look at Energy transfer partners, we put it through the following selection process and it meets and exceeded all the listed requirements.
The selection process
- A profit margin of 20% or higher
- Sales should be trending upwards for the past five years
- 3-5 year Projected growth rate of 10% or higher
- A five year expected PEG ratio that is below the industry average of 2.76. Energy transfer has five year expected PEG of 1.43
- Interest coverage ratio of 3.00 or higher
- A trailing P/E that is significantly below the industry average of 22.44. Energy transfer partners has a trailing P/E of 9.07
Read Full Article Here: http://turnkeyoil.com/2012/11/24/energy-transfer-partners-is-fundamentally-strong-etp/
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.