BIG DOLLAR RALLY UNDERWAY
OIL SELLING OFF...MLPS?
My bet today is that MLPS will follow the dollar higher and not follow crude oil and big energy stocks lower. Stock futures are stronger off that horror show yesterday in the overall market. MLPS closed flat yesterday and with the exception of a couple of issues most mlps didn't do much.
US Shipping (USS) finished the day down 3 dollars to just over 4 as it says it looks like the distribution will go bye bye and why hold an mlp if there is no payout. Also Teekay (TOO) picked yesterday to announce a stock offering after the close which accounts for the drop yesterday in that stock.
This morning we have no corporate headlines and no upgrades or downgrades. Crude is down nearly 3 dollars right now but thats off yesterday's 6 dollar gain. I guess we need to get used to these big multidollar swings.
It might be nice to see one of these guys do a deal or something since the news flow lately has been almost non existent.
joseph cioffi's Source Page - Associated Content
3 comments:
USS is indeed lower again this morning. It's an excellent bet that the distribution will be eliminated to help meet debt covenants. Why hold an MLP with no payout? Because it is a value play. It's a tough market for them, but I believe there is value in the assets and business. I bought this morning from $3.17 to $3.20. We'll have to see how this plays out. Probably some more pain before any gain (if any).
Thinking of selling? NAV for $125/$11.70 11-Jun-08 04:56 pm
Here's today's closing prices, divided by Net Asset Value, assuming $125 oil and $11.70 NG (almost 10% lower than the today's actual prices):
ATN #DIV/0!
BBEP 60%
CEP 66%
EVEP 51%
LGCY 72%
LINE 57%
QELP #DIV/0!
VNR 57%
The above comment comes from "porciuscato" in the LINE message board. A real knowledgeable person who disects this type of information carefully.
Carlos
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