Stephen Ellis: I'd like to talk about Enterprise Product Partners, which is a wide-moat name. We have a $30 fair value estimate on it.
We see Enterprise is undervalued for three reasons. First, frac spreads have more than doubled this year, and this will really benefit Enterprise's gathering and processing operations through higher spreads. Second, we expect NGL volumes as well as oil volumes to substantially increase over the next few years, and this will benefit Enterprise's unutilized pipelines without necessarily requiring the incremental capital expenditures, therefore boosting returns on capital. Third, we see Enterprise is undervalued because of its export position on the Gulf Coast. In 2016, it handled about 50% of the LPG volumes exports for the U.S. We think as increasingly NGLs get pulled toward the Gulf Coast because of wider international differentials, a lot of Enterprise's assets would be involved here and therefore benefit from higher fees.
For those three reasons we see Enterprise as undervalued.