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Wednesday, February 1, 2017 Stock Pick

Stock Price: $31.39

Plains All American Pipeline LP engages in the provision of transportation, storage, terminal ling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas-related petroleum products.

The Dakota Access and Keystone XL pipelines both look back on track and ready to be built under the Trump administration with executive orders being signed to revive both. This is a big deal for pipeline companies as both old and new pipelines have a future again in the United States.

PAA is a $20.7 billion pipeline company with headquarters in the oil and gas hub of Houston, TX. Over 4.6 million barrels of oil and gas are handled by PAA a day through its Transportation division. PAA is certainly a pipeline play and recently received an upgrade from Neutral to Outperform from Robert W. Baird.

PAA had revenue last year of $22.97 billion with net income of $916 million. Last quarter, the company generated $5.16 billion with net income of $298 million. Certainly it can be imagined that if PAA was doing this well in an unfavorable environment the how well will the company do with old energy such as oil and natural gas making a comeback.

PAA trades at 0.9 times sales and 2.36 times book value. PAA is entering a favorable environment and with PAA shares just above its 50-day moving average, there looks to be plenty of room for PAA to move up over the next 6 - 12 months.

Speculative Score: 1

1 Being the Least Speculative and Most Confident

10 Being the Most Speculative and Possibly the Most Risky

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