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Rating Change Detail - DCP MIDSTREAM PARTNERS, LP (DPM) - 3/11/2010
The stock was downgraded from Strong Interest to No Interest on 3/11/2010 by the P/E/Growth Investor Strategy based on the principles of Peter Lynch. The score according to this strategy fell from 93% to 0%. A full detailed analysis of DPM using this strategy is included below. For a full detailed analysis of DPM using 12 proven strategies of Wall Street Legends, take a free trial to Validea.com

Detailed Analysis of DCP MIDSTREAM PARTNERS, LP (DPM)

Strategy: P/E/Growth Investor - Based on: Peter Lynch

DETERMINE THE CLASSIFICATION:

This methodology would consider DPM a "fast-grower".

P/E/GROWTH RATIO: [FAIL]

The investor should examine the P/E (N/A) relative to the growth rate (20.64%) for a company. This is a quick way of determining the fairness of the price. In this particular case, the P/E/G ratio for DPM is not available which means an opinion could not be rendered on this criterion. This criteria is the most important one in the methodology and a failure of it will automatically result in a 0% score for the overall analysis.

SALES AND P/E RATIO: [NEUTRAL]

For companies with sales greater than $1 billion, this methodology likes to see that the P/E ratio remain below 40. Large companies can have a difficult time maintaining a growth rate high enough to support a P/E above this threshold. DPM, whose sales are $942.4 million, is not considered large enough to apply the P/E ratio analysis. However, an investor can analyze the P/E ratio relative to the EPS growth rate.

INVENTORY TO SALES: [FAIL]

When inventories increases faster than sales, it is a red flag. Unfortunately we do not have sufficient data for DPM to evaluate this criterion.

EPS GROWTH RATE: [PASS]

This methodology favors companies that have several years of fast earnings growth, as these companies have a proven formula for growth that in many cases can continue many more years. This methodology likes to see earnings growth in the range of 20% to 50%, as earnings growth over 50% may be unsustainable. The EPS growth rate for DPM is 20.6%, based on the average of the 4 and 5 year historical eps growth rates using the current fiscal year eps estimate, which is considered very good.

TOTAL DEBT/EQUITY RATIO: [PASS]

Even though DPM's Debt/Equity (162.3%) is high, this an acceptable level for a utility company.

For a full detailed analysis of DPM using 12 proven strategies of Wall Street Legends,
take a free trial to Validea.com

Rating Change Detail - DCP MIDSTREAM PARTNERS, LP (DPM) - 3/11/2010

Detailed Analysis of DCP MIDSTREAM PARTNERS, LP (DPM)

Strategy: P/E/Growth Investor - Based on: Peter Lynch