NEW YORK (TheStreet) -- Shares of Energy Transfer Equity (ETE) are down by 3.61% to $65.92 on heavy volume in late afternoon trading on Monday, after the energy services limited partnership's offer to acquire Williams Companies (WMB) was rejected.
The acquisition would have been an all-equity transaction valued at $53.1 billion, including the assumption of debt and other liabilities.
So far today, 8.13 million shares of Energy Transfer Equity have exchanged hands as compared to its average daily volume of 1.21 million shares.
"ETE believes that a merger with Williams and adding Williams Partners (WPZ) to its family of partnerships would create significantly more value to the Williams stockholders than the proposed merger of Williams and WPZ," the company said in a statement.
Earlier today, Williams Companies released a statement saying it found Energy Transfer Equity's unsolicited offer undervalued the business.
TheStreet's Jim Cramer, portfolio manager of the Action Alerts PLUS Charitable Trust Portfolio had this to say about the Energy Transfer Equity offer: "This deal would create a pipeline colossus. We own ETP for the trust and it would be a huge winner if this deal gets done because it could have pricing power that it does not have now."
Separately, TheStreet Ratings team rates ENERGY TRANSFER EQUITY LP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate ENERGY TRANSFER EQUITY LP (ETE) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ENERGY TRANSFER EQUITY 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 two years. We feel that this trend should continue. During the past fiscal year, ENERGY TRANSFER EQUITY LP increased its bottom line by earning $1.11 versus $0.31 in the prior year. This year, the market expects an improvement in earnings ($2.23 versus $1.11).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 69.0% when compared to the same quarter one year prior, rising from $168.00 million to $284.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ENERGY TRANSFER EQUITY LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 29.42% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- Despite the weak revenue results, ETE has outperformed against the industry average of 38.7%. Since the same quarter one year prior, revenues fell by 23.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: ETE Ratings Report