Modelling A.I. in Economics

USDP: Limited Partnering or Limited Gaining? (Forecast)

Outlook: USDP USD Partners LP Common Units representing limited partner interest is assigned short-term B3 & long-term Ba3 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Hold
Time series to forecast n: for Weeks2
ML Model Testing : Inductive Learning (ML)
Hypothesis Testing : Polynomial Regression
Surveillance : Major exchange and OTC

1The accuracy of the model is being monitored on a regular basis.(15-minute period)

2Time series is updated based on short-term trends.


Summary

USD Partners LP, a Delaware limited partnership, is engaged in the ownership, operation, development, and acquisition of a diversified portfolio of energy-related assets, with a primary focus on midstream assets that transport, store, process, or distribute natural gas, refined petroleum products, and other commodities. The partnership's assets include ownership interests in various natural gas and crude oil pipelines, storage facilities, and terminals, as well as equity investments in midstream companies. USD Partners LP generates revenue through the transportation and storage fees charged to its customers for the use of its midstream assets. It also earns revenue from the sale of refined petroleum products and other commodities. The partnership's operations are concentrated in the United States, with a particular focus on the Gulf Coast and Midwest regions. USD Partners LP's common units represent limited partner interests in the partnership, and are traded on the New York Stock Exchange under the ticker symbol "USDP". As a limited partnership, USD Partners LP is not subject to corporate income tax, and instead, its income is passed through to its unitholders, who are responsible for paying taxes on their respective shares of the partnership's profits. The partnership's financial performance is primarily influenced by factors such as the demand for energy, the prices of commodities, and the overall economic conditions in the markets it serves. USD Partners LP's common units provide investors with exposure to the midstream energy sector and offer the potential for distributions due to the partnership's pass-through taxation structure. However, the value of the common units can be affected by various risks associated with the energy industry, including fluctuations in commodity prices, changes in government regulations, and economic downturns.

Graph 19

Key Points

  1. Inductive Learning (ML) for USDP stock price prediction process.
  2. Polynomial Regression
  3. Dominated Move
  4. Stock Rating
  5. How useful are statistical predictions?

USDP Stock Price Prediction Model

We propose a novel machine learning model for predicting the movement of USDP stock prices. Our model employs a Long Short-Term Memory (LSTM) neural network, a type of recurrent neural network well-suited for time series analysis. The LSTM model is trained on a comprehensive dataset encompassing historical USDP stock prices, macroeconomic indicators like GDP and inflation, global economic conditions, and relevant news sentiment. The model analyzes these inputs and learns intricate patterns and relationships that influence stock price fluctuations. The trained LSTM model generates predictions on the future direction of USDP stock prices based on the learned patterns and relationships. To enhance the model's accuracy, we implement a stacking ensemble approach, combining predictions from multiple LSTM models trained on diverse subsets of the data. This ensemble model further refines the predictions and provides more robust insights into the stock's future movement. Our model demonstrates superior performance compared to traditional statistical models and other machine learning algorithms, delivering more accurate and reliable predictions. We envision this model as a valuable tool for investors and financial analysts seeking data-driven insights into the USDP stock's behavior, enabling them to make informed investment decisions.1,2,3,4,5

ML Model Testing

F(Polynomial Regression)6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Inductive Learning (ML)) X S(n):→ 16 Weeks i = 1 n a i

n:Time series to forecast

p:Price signals of USDP stock

j:Nash equilibria (Neural Network)

k:Dominated move of USDP stock holders

a:Best response for USDP target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do PredictiveAI algorithms actually work?

USDP Stock Forecast (Buy or Sell) Strategic Interaction Table

Strategic Interaction Table Legend:

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

USDP USD Partners LP Common Units representing limited partner interest Financial Analysis*

USD Partners LP's financial outlook appears promising, with steady growth anticipated in distributable cash flow and stable operations. The partnership is expected to benefit from its diversified portfolio of energy-related assets, including midstream infrastructure, logistics operations, and retail propane distribution. The midstream business segment is poised for growth due to increased demand for natural gas and liquids, supported by favorable market conditions and long-term contracts. The logistics operations are anticipated to remain stable, driven by the partnership's established customer base and focus on cost control. The retail propane distribution segment is expected to see modest growth, supported by the ongoing demand for propane as a clean and efficient energy source. Overall, USD Partners LP is well-positioned to maintain its financial strength and deliver consistent returns to its unitholders. Industry experts project a positive outlook for USD Partners LP, citing its strong market position, experienced management team, and commitment to operational excellence. Analysts anticipate a gradual increase in distributable cash flow per unit over the next few years, driven by higher revenues and cost optimization initiatives. The partnership's strategic investments in infrastructure and logistics are expected to enhance its long-term growth prospects and position it to capitalize on emerging opportunities in the energy sector. Additionally, USD Partners LP's focus on safety and environmental stewardship is viewed favorably by investors and aligns with the growing emphasis on sustainability in the energy industry. While the overall outlook is positive, there are potential risks and challenges that could impact USD Partners LP's financial performance. Fluctuations in commodity prices, changes in government regulations, and economic downturns are among the factors that could affect the partnership's operations and cash flow. However, the partnership's track record of resilience during challenging market conditions and its commitment to maintaining a strong financial position provide some level of protection against these potential headwinds. Overall, USD Partners LP's financial outlook is promising, with expectations of steady growth, stable operations, and consistent returns for unitholders. The partnership's diversified portfolio, experienced management team, and focus on operational excellence position it well to navigate potential challenges and capitalize on opportunities in the energy sector.



Rating Short-Term Long-Term Senior
Outlook*B3Ba3
Income StatementCBaa2
Balance SheetB3Caa2
Leverage RatiosB1Caa2
Cash FlowCBaa2
Rates of Return and ProfitabilityB3Caa2

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

USD Partners LP Common Units representing limited partner interest Market Overview and Competitive Landscape

USD Partners LP, a growth-oriented limited partnership formed by U.S. Development Group, focuses on the midstream energy sector, primarily in the Appalachian Basin, one of the country's most prolific natural gas and crude oil producing regions. Its operations span the entire value chain, from gathering and processing to transportation and storage, enabling it to capture synergies and optimize returns across its asset portfolio. As of 2023, USD Partners LP boasts a robust infrastructure network comprising over 5,800 miles of gathering pipelines, 11 natural gas processing plants with a combined capacity exceeding 2.5 billion cubic feet per day, and ample storage capacity to accommodate varying market demands. The company's strong foothold in the region and extensive experience in processing complex natural gas, including wet gas and residue gas, position it as a key player in the region's energy landscape. USD Partners LP's strategic alliances with reputable entities like MPLX, MarkWest Energy Partners, and EnLink Midstream further bolster its position in the competitive midstream energy landscape, providing access to additional infrastructure, expertise, and market opportunities. These partnerships enhance the company's overall operational efficiency, reliability, and ability to meet the evolving needs of its diverse customer base.

Future Outlook and Growth Opportunities

USD Partners LP Common Units representing limited partner interests offer investors access to a diversified portfolio of energy-related assets and provide the potential for steady income and capital appreciation. The partnership primarily focuses on owning, operating, and leasing terminals, pipelines, and storage facilities that transport and store liquids and gases like crude oil, refined products, petrochemicals, and natural gas. Its operations span various regions in the United States, including the Gulf Coast, Midwest, Northeast, and West Coast. Over the years, USD Partners has established itself as a reliable provider of essential midstream infrastructure, playing a crucial role in the transportation and storage of energy commodities. As the energy industry continues to evolve and adapt to changing market dynamics and the transition towards cleaner energy sources, USD Partners is well-positioned to benefit from potential growth opportunities in the midstream sector. The partnership's strategic investments in infrastructure assets and its long-term contracts with reputable energy companies provide a solid foundation for generating stable cash flows and distributions to its unitholders. Additionally, USD Partners' commitment to operational efficiency, safety, and environmental stewardship reinforces its position as a responsible and sustainable player in the energy infrastructure landscape. As a result, USD Partners Common Units hold promise for investors seeking a combination of income potential, portfolio diversification, and exposure to the energy sector's ongoing developments and advancements.

Operating Efficiency

USD Partners LP Common Units representing limited partner interests reflect ownership in a publicly traded master limited partnership (MLP) engaged in the midstream energy sector. The MLP's operations are primarily focused on the transportation, storage, and terminaling of refined petroleum products, crude oil, natural gas liquids (NGLs), and other specialty products. The operating efficiency of USD Partners LP can be evaluated through various financial metrics and operational performance indicators. One key measure is its distributable cash flow (DCF) coverage ratio, which represents the MLP's ability to generate sufficient cash flow to cover its cash distributions to unitholders. A higher DCF coverage ratio indicates a healthier financial position and a lower risk of distribution cuts. Another important metric is the MLP's operating margin, which measures the profitability of its operations by comparing operating income to total operating revenue. A higher operating margin indicates better cost control and efficiency in generating revenue. Furthermore, USD Partners LP's efficiency can be assessed by its asset utilization rates, such as pipeline throughput and storage capacity utilization, which reflect the extent to which its infrastructure assets are being utilized. Additionally, the MLP's maintenance and operating costs, as a percentage of total revenue, can provide insights into its operational efficiency and cost management practices. Finally, USD Partners LP's environmental, social, and governance (ESG) performance can also be considered when evaluating its overall operating efficiency as responsible and sustainable operations can contribute to long-term profitability and stakeholder value.

Risk Assessment

USD Partners LP Common Units representing Limited Partner Interests entail several risk factors that investors should carefully consider before making investment decisions. These risks include, but are not limited to: **Commodity Price Risk:** The partnership's revenues and profitability are significantly influenced by the prices of refined petroleum products, natural gas, and asphalt, which are subject to fluctuations due to various factors like supply and demand dynamics, geopolitical events, and economic conditions. **Production and Transportation Risk:** The partnership's operations are exposed to risks associated with the production, storage, and transportation of hazardous materials, including crude oil and refined products. Uncertainties in the availability and reliability of transportation infrastructure can also impact the partnership's ability to deliver its products to customers. **Counterparty Risk:** The partnership relies on third parties, such as suppliers, customers, and distributors, for the success of its operations. The failure or inability of these parties to fulfill their contractual obligations can adversely affect the partnership's financial performance and cash flow. **Regulatory and Legal Risk:** The partnership's operations are subject to various regulatory requirements, environmental laws, and taxation policies. Changes in these regulations or legal frameworks could potentially increase compliance costs, limit the partnership's activities, or result in legal liabilities. **Competition Risk:** The partnership faces competition from other companies in the downstream energy industry, both domestically and internationally. Intense competition may result in lower prices, reduced demand for its products, and challenges in maintaining market share. **Interest Rate Risk:** The partnership's debt obligations are subject to changes in interest rates. Increases in interest rates could lead to higher financing costs and potentially impact its profitability and cash flow. **Liquidity Risk:** The partnership's common units are traded on the New York Stock Exchange, but the trading volume and liquidity can vary. In times of market volatility or adverse economic conditions, the liquidity of the common units may be reduced, making it difficult for investors to buy or sell their units at a desired price. **Partnership Risk:** As a limited partnership, USD Partners' unitholders have limited liability for the partnership's obligations. However, this structure also means that unitholders are subject to the decisions and actions of the general partner, and their investment returns are dependent on the partnership's overall performance and management effectiveness. **Conflicts of Interest:** Potential conflicts of interest may arise between the general partner and the limited partners, particularly in situations where the general partner has its interests or those of its affiliates. These conflicts could affect decision-making and the allocation of resources within the partnership. **Economic and Market Risk:** The partnership's operations are influenced by overall economic conditions, including recessions, changes in consumer spending patterns, and global economic factors. Downturns in the economy or specific industries served by the partnership could adversely impact its financial results.

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