LOTS OF DISTRIBUTION INCREASES
After the close yesterday a number of mlps announced distribution increases including this surprise from Boardwalk Partners (BWP) which boosted the payout inspite of its previously announced cost overrunns. We also have Magellan Midstream Partners raising the payout along with Magellan Holdings (MGG). Energy Transfer Partners (ETP) and Energy Transfer Equity (ETE) are lifting payouts and i love ETP's rate of .86875 cents. Talk about precision...86 and 7/8ths cents! Sempra Energy Partners (SEP) is increasing its payout as well.
I mentioned earlier this week that we need to watch any drop in crude oil as that will take energy stocks down hard and could pull us down with them. It is sad since MLPS were left completely behind in the energy stock rally and were sold off hard during the credit mess. Now we run the risk of being taken down for a run-up we never really enjoyed. But not to worry because the chairman of Nustar (NS) says crude oil will never drop in price again and the sky is the limit for the price. I still think we hit some short term top at 120 and could pull back pretty hard....maybe back below 110 or 105 in a hurry. But then again...who knows.
Early post this morning as i am working. Stock futures are higher going into the pre-market. Crude oil traded down to 114 yesterday..down 3.60 at one point before closing just over 116. Its down about 50 cents this morning in electronic trading. Gasoline is down a nickel as is nat gas. 2 year note yields continue to rise which is an indicator of an increasing appetite for risk. the dollar continues a very strong rally against the Euro. All good things. The MLP index managed to close above 290...down 1.50 ish on the day. Remember we just ran from 262 to 294 in a hurry so the pullback while annoying was not overally damaging. Still judging by the number of angry bearish posts i can't help but be optimistic. Then again that is my nature.
Working this morning so i will try and post headlines as they break.
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8 comments:
Lessons Learned.
While I did not own CLMT, it should be disquieting for MLP investors to observed their Divy slashng and subsequent drop in share price. It's disquieting to me since a glance at some of their Yahoo key statistics would have led me to believe they were a viable investment. My favorite metrics as D/E, EBITDA, ROE were attractive. What happened??
On Feb 14, they announced a severe 60% drop in EBITDA yoy. Initially the price declined slightly. Didn't fall of the clif until they slashed the div.
Feb 14 PR follows
"reported net income for the three months ended December 31, 2007 of $7.8 million compared to $32.1 million for the same period in 2006. Earnings before interest expense, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA (as defined by the Partnership's credit agreements) were $12.7 million and $8.0 million, respectively, for the three months ended December 31, 2007 as compared to $36.7 million and $23.3 million, respectively, for the comparable periods in 2006.
Went back checked the MLPs I own, all reported increases in EBITDA.
Lessons learned posted by
Reading-tee-Leaves
I don't think CLMT is the right type of company for the MLP structure.
You cannot compare CLMT to any midstream MLP, its a totally different animal.
It is beyond me how investors are not seeing the value behind SemGroup (SGLP). It is THE most undervalued MLP in the space.
Anonymous said...
It is beyond me how investors are not seeing the value behind SemGroup (SGLP). It is THE most undervalued MLP in the space.
The same could be said for about 95% of MLPs...
Technically there can only be one moast undervalued MLP.
Great call by Morgan Stanley on NS yesterday. +2% today.
Please ignore the ANALysts.
the MS analyst was simply clearing a path for some of his clients to buy NS at a lower price.
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