Seeking Alpha: Brookfield Infrastructure Looks Undervalued As Long-Term Bargains Emerge

Back in June of 2015, I wrote that analysis and sentiment around Brookfield Infrastructure Partners (NYSE:BIP) had a tendency of falling into the "prisoner of the moment" trap, and I think that remains the case today. The decline in value of these units hasn't been as bad as some (like Macquarie Infrastructure (NYSE:MIC), DP World, and COSCO Pacific), but it does seem as though the market is concerned about the company's modest exposure to energy and its more substantial exposure to commodity-sensitive economies like Brazil and Australia.

I certainly do think that BIP's affection for Australia and Brazil is a risk given the commodity sensitivity, but it's hard to argue with management's basic thesis that Brazilian assets are trading well below their probable long-term value. I would expect more capital recycling efforts to avoid raising capital at a discount to fair value, but BIP management is looking at a big buffet of options, and assets in stressed emerging markets or North American energy infrastructure may be too good to pass up. I've trimmed my long-term growth estimate a bit given the weakness in commodity-driven economies, but I believe a long-term growth rate of 6% in distributable cash flow can support a fair value above $49 today.

Read the full article here:
Brookfield Infrastructure Looks Undervalued As Long-Term Bargains Emerge