First off let me begin by admitting that while i try to stay on top of all the companies in our MLP universe inevitiably one or two falls through the cracks. Thanks to Alan for pointing this out to me with a recent MLP IPO EV Energy Partners (EVEP) which yesterday announced a deal to purchase some assets in Michigan. It has also pre-announced it distribution increase for April q1 which prices it to yield over 8%. So we have another Linn Energy situation where the market may be underpricing based on yield.
Growers imho should be yielding closer to 6% so this says to me...all things being equal that means upper 20s to near 30 here by April. $1.84 annual over a $30 gives you a 6.1% yield.
Also we have some leftover news from last night with Enterprise Products Partners (EPD) which is buying assets from Encana. And who cares about Alcoa as Energy Transfer Partners (ETP) came out with earnings yesterday which has all kinds of distortions in it but the company endorsed its previous guidance for 2007.
Now for some weather news this morning and let me caution you ahead of time. You may be hearing other things elsewhere but the bottom line is that Winter will arrive across the midwest and eastern states starting Monday in the midwest and Tuesday in the northeast. Temperatures will be near or below normal and in fact the overall pattern could turn bitterly cold toward the end of January. It looks to me like the pattern may lock in for awhile. Natural gas could continue its rally over the next few weeks if this reality sets in. Meanwhile crude oil is taking gas again this morning as we continue to sit right at the so-called critical $55 level. Yesterday the crude recovered but the XOI index closed near its low of the day. The big oil stocks are saying that the 55 buck level will not hold as i believe the stocks tend to lead the complex. If the XOI turns higher today if crude falls then maybe the bottom is at hand. Stay tuned here.
Stocks are weak this morning on the futures side. The 10 year is at 4.66%. MLPS held up well yesterday as the rest of energy went down. We wait to see what the open brings us. No upgrades or downgrades on the list this morning at least so far.
joseph cioffi's Source Page - Associated Content
4 comments:
any thoughts on the etp earnings report? they are over owned and will need to deliver on the forecasted growth to move up from here. i love ete at 4.5%, but i think it could suffer further..
oh and please don't throw your toys out of the pram like another poster on the yahoo board because of lack of feedback!
also for full disclosure i sold a chunk of ete to clear my margin account yesterday. this will give me staying power if we go below 30 and buying power if things really get nutty
why would i throw my toys out of the pram...i love feedback..always welcome
i think ete is the better buy here because they have all the incentive distribution rights (IDR's) and they are in 50-50 splits. ETP has done well but its to big to grow at the same rates as in the past 2 years.
The earnings look in-line. Lots of distortions to work through but the selling today looks to be no big deal. ETE is a good buy under 30 imho if it gets there.
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