MLPS are higher but off the highs with the index up fractionally. Kinder Morgan (KMP) is the drag down 1 and change as they are going to an offering. Since their stock price is in the high 40s...if they can pull it off...why not! Otherwise most mlps are higher with Holly Partners (HEP) is up 2. Martin Midstream(MMLP) Sunoco Logistics (SXL) Plains All American (PAA) and Linn Energy (LINE) are up around 1 point each.
Crude oil is up 5 dollars on the lower dollar. Thats given another boost to energy and material stocks today. The action continues to be encouraging. We need to see the buying spread into some of the more distressed MLPS that continue to languish with single digit handles.
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About Me
- joewxman
- a meteorologist with a knack for trading and investing in MLPS! I also like horse racing, enjoy cigars and a good port wine.
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4 comments:
Joe. As I type, KMP shares are down $2.28/4.64%. This is more than the AMZ index is down, so the market presumably seems this issuance of new shares as dilution of the value of current shares. Is it appropriate to read into issuance of new shares that KMP (or any company) sees this as a preferable way to raise capital for future projects, as compared to borrowing? Maybe they cannot borrow at an acceptable interest rate?
Thanks,
JCarr
KMP is one of the few mlps that has held up in price. Lets face it Kinder Morgan unitholders have to be happy about the performance.
The company is one of the few in the group that can use equity to finance these days. They figure a 5% dilution in price is far better to swallow then going to the debt markets and paying 10% or more given market conditions. I agree...we can read into it.
Joe. With the issuance of new shares, should one assume the distribution will be cut or not be impacted, or maybe even be raised due to the added benefit to the company that the new funding (new projects) will allow?
Thanks,
JCarr
PS: I know you do not know the answer to the question, but what is your educated guess? Thanks
KMP already pre announced increasing distribution guidance for 2009. I don't the equity offering changes that outlook.
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