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Monday, November 19, 2007

EV PARTNERS BUYS AND UPS
IS "THE" BOTTOM NEAR?
Magical question first. I spent some time this weekend...okay a lot of time this weekend on Factiod's website. It is a wealth of information on MLPS and no reader of this blog should do anything without looking there first. If you have questions about everything from DCF to CAGR you have to go there. If you don't know what dcf is you have to go there. Anyway i did notice that the MLP vs 10 year yield spread is now up to 250 which is where it was back in December 2005 which came after 6 months of declines and led to a nice rally in the beginning of 2006.

We have only seen 2 miniscule up days this month and the MLP index is down almost 5% since November 1st. The point spread angle tells me that we are getting close. But holding 290 is most important in my view.

Meanwhile they finally got around to selling down EV Partners last week and this morning some good news as they are buying some nat gas properties in West Virginia and they are pre-announcing a distribution boost to 2.40 annual. So that puts the going foward yield at a generous 7.5% based on a 32 dollar stock price. In the past going foward yields like this have been good entry points. But as we have seen with Linn Energy (LINE) that doesn't mean they can take the going foward yield to 10% if they want to.
No upgrades or downgrades so far. Oil is up a dollar this morning, natural gas is up about 2 cents. Stock futures are down this morning but not by too much. This is a holiday week which is usually bulllish for stock prices as a whole.

3 comments:

Anonymous said...

eThis morning Lehman cut its PT on LINE from 41 to 34. The report was pretty negative citing disappointing 3Q results, rising debt levels, the need to borrow 2/3 of the cash needed for their '08 development program, their need to make another acquisition in order to cover the upcoming distribution increase over the long term, overhang of restricted shares hitting the market, projected tight coverage ratio etc.

Bruce Sherman
Oakland, Oregon

lou said...

where can we finf factiod's site???

Thanks

Anonymous said...

Here's the link to FACTOIDS:

http://home.flash.net/~factoids/

Carlos