Its Monday morning of Thanksgiving week which effectively means 3 days of trading spread out over 4 as we are closed Thursday. Its a quiet news morning in this group with not much happening so far. Boardwalk Partners however hits the wires with news that its open season on pipelines (Wabbit Season...Duck Season for you Bugs Bunny Fans!).
In the land of upgrades and downgrades we have Lehman resuming coverage this morning on Plains All American (PAA) with an outperform and a $55 price target. No other upgrades or downgrades at least so far.
Last Friday after the close Valero Holdings (VEH) announced that it has filed for a "secondary offering" of 22 million shares. We're all use to secondary offerings of new shares from time to time in the MLP group as money is raised for new aquisitions etc etc. But in this particular case these are not new shares. These are shares that Valero Energy (VLI) has held since the public offering and it has been their intention since day one that the company would sell all its shares.
Meanwhile Valero Holdings has been an underperform since its ipo and is still trading below its opening price of 22 bucks. And I suspect that this news will keep some selling pressure on the shares. In fact they are already being offered below Friday's close. But this secondary is not an offering for new shares so there is no dilution here. This sale by Valero (VLI) has been in the cards since day one and many have argued that the overhang of those shares hitting the market has kept this stock price down. I think this could be a buying opportunity because again no dilution here. And once the news is absorbed we could see this one finally start moving. Watch support levels at the moving averages . They could serve as good entry points and laddering in is always a good way to accumulate a position.
joseph cioffi's Source Page - Associated Content
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