Paa Natural Gas Storage, L.P. Common Units Representing Limited Partner Interests (PNG) Quote

Met with management. Not a fan. Too many red flags popped up in deep DD.

Kraken is starting to break out with high volume. Hold on for a long ride.

4 reasons PNG provides solid value for income investors at just over $18 a share:

The latest quarter marks the fifth straight quarter that PNG has easily beat earnings estimates. The average beat over consensus over that time span is significantly north of 20%.

Insiders have been net buyers of the shares over the past year.

The stock yields 7.8% and has increased payouts by more than 60% over the last two years.

PNG sells for just 4% over book value and has a compelling five year projected PEG (1.28) for a vehicle that yields almost 8%.

PNG's very impressive revenue growth greatly exceeded the industry average of 11.9%. Since the same quarter one year prior, revenues leaped by 115.6%. Growth in the company's revenue appears to have helped boost the earnings per share.

PAA NATURAL GAS STORAGE LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, PAA NATURAL GAS STORAGE LP increased its bottom line by earning $0.83 versus $0.52 in the prior year. This year, the market expects an improvement in earnings ($1.01 versus $0.83).

The gross profit margin for PAA NATURAL GAS STORAGE LP is rather low; currently it is at 24.60%. It has decreased significantly from the same period last year. Regardless of the weak results of the gross profit margin, the net profit margin of 14.70% is above that of the industry average.

PNG has underperformed the S&P 500 Index, declining 21.55% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.