TC Pipelines, LP

TC Pipelines, LP (TCLP) shares have traded mostly sideways in 2008, but that movement belies the fundamental strength of this natural gas pipeline operator. The company recently reported impressive first-quarter results that imcluded a 68% jump in earnings from the same period last year. Analysts continue to revise their estimates upward, placing this growth stock into virtual value territory.

TC Pipelines, LP owns and operates natural gas pipelines running from Canada to various U.S. markets. The company was founded in 1998, carries a market cap. of $1.26 billion and is headquartered in Omaha, Nebraska.

Another Solid Quarter

TC Pipelines chimed-in with solid first-quarter results on April 21 that provide clear evidence that this company is a force to be reckoned.

Net income jumped ahead to $33.6 million, up from $20 million in the same period last year. This produced earnings of 89 cents per share, well ahead of analyst expectations of 69 cents per share.

Cash Distributions Surge

The growth in income enabled TC to boost its cash distributions, which increased to $25.6 million from $11.3 million in the same quarter last year.

TC has been making a habit of surprising and beating analyst estimates, having done so by an average of 12 cents, or 18.66% over the last three quarters.

Estimates Climbing

After the very solid quarter, the analyst community went ahead and boosted estimates. The current-year estimate currently stands at $2.78 per share, up from $2.52 per share 60 days ago.

Attractive Valuations

Based upon this earnings projection, this stock is very attractively valued, carrying a forward P/E multiple just a pinch under 13X, a discount to the overall market.

The Chart

In spite of the solid fundamental composition, this company's stock price has had a fairly mixed 2008, trading lower early in the year but recently recovering most of those losses and once again approaching par. There appears to be considerable resistance just above the $37 mark, which has been tested a number of times over the last few weeks but never effectively eclipsed. But with energy more in the spotlight than ever, and plenty of energy companies booking record profits, TC should be effectively positioned to participate in the gains. Take a look at the chart below.