Is Plains All American Pipeline L.P. (PAA) positioned for future growth?

Plains All American Pipeline L.P. (NASDAQ: PAA) stock fell -1.09% on Friday to $11.75 against a previous-day closing price of $11.88. With 4.3 million shares changed hands, the volume of the stock remained lighter than its average volume of 4.83 million shares. During the session, the Oil & Gas Midstream company that operates in wider Energy sector, reached to the highest price of $12.10 whereas the lowest price it dropped to was $11.75. The 52-week range on PAA shows that it touched its highest point at $12.57 and its lowest point at $8.64 during that stretch. It currently has a 1-year price target of $14.50. With its current market cap of 8.50 billion, PAA has annualized dividend of $0.87 while the current yield stands at 7.40%. Beta for the stock currently stands at 1.69.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of PAA was down-trending over the past week, with a drop of -4.94%, but this was up by 1.03% over a month. Three-month performance surged to 20.39% while six-month performance rose 9.71%. The stock gained 27.16% in the past year, while it has gained 25.80% so far this year. A look at the trailing 12-month EPS for PAA yields 0.83 with Next year EPS estimates of 1.40. For the next quarter, that number is 0.30. This implies an EPS growth rate of 114.30% for this year and 15.26% for next year. EPS is expected to grow by 14.52% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 5.00%.

Float and Shares Shorts:

At present, 702.00 million PAA shares are outstanding with a float of 451.43 million shares on hand for trading. On Jul 14, 2022, short shares totaled 24.11 million, which was 3.43% higher than short shares on Jun 14, 2022. In addition to Mr. Wilfred C.W. Chiang as the firm’s CEO & Chairman of Plains All American GP LLC, Mr. Harry N. Pefanis serves as its Pres & Director of Plains All American GP LLC.

Institutional Ownership:

Through their ownership of 44.37% of PAA’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 47.11% of PAA, in contrast to 21.15% held by mutual funds. Shares owned by individuals account for 20.25%. As the largest shareholder in PAA with 8.33% of the stake, ALPS Advisors, Inc. holds 58,117,530 shares worth 58,117,530. A second-largest stockholder of PAA, Invesco Advisers, Inc., holds 22,552,390 shares, controlling over 3.23% of the firm’s shares. Tortoise Capital Advisors LLC is the third largest shareholder in PAA, holding 20,697,873 shares or 2.97% stake. With a 8.31% stake in PAA, the Alerian MLP ETF is the largest stakeholder. A total of 57,963,802 shares are owned by the mutual fund manager. The Invesco SteelPath MLP Income Fund, which owns about 1.24% of PAA stock, is the second-largest Mutual Fund holder. It holds 8,633,333 shares valued at 101.44 million. Kayne Anderson MLP/Midstream Inve holds 1.23% of the stake in PAA, owning 8,613,360 shares worth 101.21 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for PAA since 21 analysts follow the stock currently. There are 13 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 3 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With PAA analysts setting a high price target of $18.00 and a low target of $13.00, the average target price over the next 12 months is $14.86. Based on these targets, PAA could surge 53.19% to reach the target high and rise by 10.64% to reach the target low. Reaching the average price target will result in a growth of 26.47% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. PAA will report FY 2022 earnings on 02/07/2023. Analysts have provided yearly estimates in a range of $1.40 being high and $0.75 being low. For PAA, this leads to a yearly average estimate of $1.15. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Plains All American Pipeline L.P. surprised analysts by -$0.00 when it reported $0.22 EPS against a consensus estimate of $0.22. The surprise factor in the prior quarter was -$0.17. Based on analyst estimates, the high estimate for the next quarter is $0.43 and the low estimate is $0.14. The average estimate for the next quarter is thus $0.29.

Dividends & Yield:

In terms of dividends, PAA has a current ratio of $0.87, which is $0.87 over the trailing 12-months, while a dividend of $1.15 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and PAA currently yields $6.77. In the past year, PAA’s dividend yield has been $6.77, but when looking at the stock over the past five years, its yield has been $8.40. Accordingly, PAA has a current buyback yield of $2.43. This was $2.43 for the TTM.

Summary of Insider Activity:

Insiders traded PAA stock several times over the past three months with 8 Buys and 8 Sells. In these transactions, 391,298 shares were bought while 118,359 shares were sold. The number of buy transactions has increased to 12 while that of sell transactions has risen to 17 over the past year. The total number of shares bought during that period was 628,714 while 3,880,080 shares were sold.

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