What Does the Market Think of EPD Shares?

By Tamara Parker • Monday, October 24 12:00 • Permanent Link

Tumbling to a price of $24.59 during today's morning trading session, shares of Enterprise Products Partners L.P. are now -20.79% below their average target price of $31.05. Does this mean the stock will reverse course? Analysts are giving EPD an average rating of buy and target prices ranging from $27.9 to $34 dollars per share.

The market seems to share this rosy outlook, since Enterprise Products Partners has a short interest of only 1.4%. This represents the percentage of the share float that is being shorted, and each short position stands for an investor's expectation that the price of the stock will go down in the future.

Short selling involves borrowing shares and then selling them at current market prices. In the successful version of the strategy, the shares are purchased at a lower price at some time in the future. The investor then returns the shares to the lender, and keeps the profit made on the sell/buy transaction.

We can make inferences about the market sentiment surrounding Enterprise Products Partners L.P. by analyzing its rate of institutional ownership. If institutions such as hedge funds and pension funds are the primary shareholders of a corporation, it most likely means that its shares are a good investment according to those institutions' analysts.

At 27.7%, the rate of institutional ownership is average, indicating that a sufficient number of institutions have concluded that it is a stable investment. Beware, however, that the rate of institutional ownership could also indicate an ongoing proxy battle or takeover attempt -- so you should also periodically check the news about a stock whose institutional ownership you are tracking.

Overall, there is mostly positive market sentiment towards Enterprise Products Partners because of its an analyst consensus of strong upside potential, a buy rating, a very low short interest, and only a small number of institutional investors. Investors should not base their decisions on market sentiment only, they should also be aware of a stock's fundamentals before committing.

At a glance, here are some essential statistics you may want to know about EPD:

It has a trailing 12 month price to earnings (Eps) of $1.71 per share
Enterprise Products Partners has a trailing 12 month Price to Earnings (P/E) ratio of 14.4 while the S&P 500 average is 15.97
The company has a Price to Book (P/B) ratio of 2.2 in contrast to the S&P 500's average ratio of 2.95
Enterprise Products Partners is a Energy company, and the sector average P/E and P/B ratios are 9.11 and 1.45 respectively

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The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.