NGL Energy Partners LP

Where It Passes

Where It Falls Short

• Profitability0% pass✓ 5✗ 30▾

  No clean pass — all 16 investors flag at least one profitability criterion

  Positive EPS (10 years)5/16 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)8/16 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-18.3%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)3.0% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-94.8M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROEN/A (negative equity)

  ✗Lynch> 15%

  EBIT / Enterprise Value1.4%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=1.4%, ROC=3.2%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-3.41%

  ✗PiotroskiROA > 0

  ROA Change YoY0.85% -> -3.41% (delta: -4.26%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=8.76%, ROA=-3.41%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY27.7% -> 30.9%

  ✓PiotroskiImproved YoY

  Pre-Tax Income / Revenue-5.2%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity

  ✗Dreman> 12%

  Margin of Safety

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity0.5% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency8/15 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue1.9%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend3.9% (2023) -> 3.0% (2025)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 23.3% -> 30.9%, operating margin 3.9% -> 3.0%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization-11.01%; #4221/6340 (top 66.6%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+23.33%; #1829/3702 (top 49.4%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0197; #1422/5884 (top 24.2%)

  ✓AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR31.6% over 5 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years2/7 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Debt & Leverage0% pass✗ 15▾

  All 12 investors flag NGL's debt & leverage

  LT Debt vs Net Current AssetsLT Debt $3.3B vs NCA $99.8M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: N/A (negative equity), IC: 0.3x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / EquityN/A (negative equity)

  ✗Lynch< 0.33

  Cash - Long-term Debt$-3.3B

  ✗LynchPositive preferred

  LT Debt / Total Assets Change64.25% -> 77.19%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities1.13

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt LevelsN/A (non-positive equity)

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=0.3x, D/EBITDA=9.9x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)

  ✗AsnessTop 30% of eligible cross-section
• Efficiency0% pass✓ 1✗ 10▾

  No clean pass — all 8 investors flag at least one efficiency criterion

  Current Ratio1.13

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)4.4%

  ✗Buffett> 10%

  ROIC - WACC-5.6%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)3.2%

  ✗Greenblatt> 25%

  Current Ratio Change YoY1.30 -> 1.05

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.75x -> 0.76x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities1.13

  ✗Dreman> 1.5

  Return on Invested Capital1.9%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=3.9%; FY2024: ROIC=8.3%; FY2025: ROIC=2.5%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest 2.5%)

  ✗SleepROIC > 12% in a majority of years
• Valuation models0% pass✗ 3▾

  NGL overvalued: all 3 models price fair value below $15.11 (median $9.64)

  Greenblatt fair value$12.36

  ✗Greenblatt-22.2% margin vs $15.11

  Munger fair value$9.64

  ✗Munger-56.7% margin vs $15.11

  Ackman fair value$9.58

  ✗Ackman-57.7% margin vs $15.11
• Valuation8% pass✓ 2✗ 26▾

  12 of 13 flag NGL's valuation — Graham, Lynch, Greenblatt +9 more

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value1.4%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=1.4%, ROC=3.2%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)5.2x

  ✓Dreman< 8x

  Price / Book Value per ShareN/A (negative BVPS)

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessOE Yield=-5.0%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=7.7%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical Average

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share13.0x

  ✓Ackman<= 25

  Price vs. Trailing Low509% of trailing low ($2.97)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization-11.01%; #4221/6340 (top 66.6%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization-0.1588; #5784/6449 (top 89.7%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per ShareN/A (non-positive TBVPS)

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change-132.5%

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+2.0504; #1062/5247 (top 20.2%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+3.69%; #1877/4519 (top 41.5%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-11.64%; #3527/6202 (top 56.9%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Growth13% pass✓ 3✗ 10▾

  7 of 8 flag NGL's growth — Graham, Lynch, Dreman +4 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: -16.2% vs Rev: 0.5%

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR30.0% CAGR over 7 years

  ✓Dreman> 5% annualized

  Positive Net Income Frequency8/15 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth-16.5%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 23.3% -> 30.9%, operating margin 3.9% -> 3.0%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR-9.6%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR31.6% over 5 years

  ✗Neff7%-20% annualized
• Verdicts13% pass✓ 2✗ 13▾

  Split decision: 12 FAIL · 2 PASS · 2 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (1/9)✗LynchFAIL (1/7)✗GreenblattRank #1754✓PiotroskiPASS (F-Score 5)✗DremanFAIL (3/11)✗MungerFAIL (1/4)✗PabraiFAIL (0/3)✗AkreFAIL (0/6)✗MarksFAIL (1/5)✗AckmanFAIL (2/9)✗TempletonFAIL (1/8)✓SleepPASS (3/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (1/6)✗SchlossFAIL (0/7)•OshaughnessyNEUTRAL (Not ranked)
• Cash Flow40% pass✓ 6✗ 6▾

  6 of 10 flag NGL's cash flow — Buffett, Lynch, Pabrai +3 more

  Free Cash Flow Proxy$-94.8M

  ✗BuffettPositive and growing

  FCF Positive and Growing$69.0M

  ✗LynchPositive and growing

  Operating Cash Flow$366.0M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=8.76%, ROA=-3.41%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)5.2x

  ✓Dreman< 8x

  P/E or FCF YieldFCF Yield=7.7%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive7/15 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap3.7%

  ✗Ackman>= 4%

  Price / FCF per Share13.0x

  ✓Ackman<= 25

  Positive Operating Cash Flow frequency14/15 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$69.0M

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+3.69%; #1877/4519 (top 41.5%)

  ✗OshaughnessyTop 10% of eligible cross-section