Wednesday, September 17, 2008
Constellation Energy Partners (CEP) reaffirms the distribution guidance, no lehman counterparty hedges, and remains connected to CEG as that company merges with Mid America Corp..a Warren Buffett entity. Sounds like good news to me given all the uncertainty. Stock closed with a 10 handle today and a yield of 22.5%. Stock has a bid above the close in after hours..no trades yet.
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joseph cioffi's Source Page - Associated Content
8 comments:
Just a piss poor performance by the MLPs today. Market storms ahead and we go nowhere.
Not to be a pollyanna here, but MLPs are so discredited as a investment class... that the rally needs to go a few more days before we will participate.
Another issue is that many natural MLP investors have sold their units and won't buy units unil after Jan 1, so they can use their suspended losses against units already sold this year.
excuse me but it was far worse earlier. MLPS staged a nice rally. If the overall market rally is real and we get followthrough tomorrow we should play catch up.
There are technical factors at play. CPLP traded down to 9.40, rallied to over 16, and closed around 12. It's one of the more illiquid names, but this is out of hand.
Many long term MLP investors have sold their units this year. If they buy back shares in the same MLP then their suspended losses from past years wouldn't be allowed to be used against some of their gains causing a huge tax bill.
Do not underestimate this factor.
HS
Maybe as part of the fall out of AIG + Lehman, there seems to be a sell off of Municipal Bonds today.
My Vanguard Muni bond funds had almost a 2% sell off today, a huge move for them. Many MUNI closed end funds had significant losses today as well.
It could be Lehman + AIG are unloading assets in many sectors beside MLPs.
HS
Any thoughts on the coal MLP's? It strikes me that out of all the commodities, coal may be the first to recover some equity value in the marketplace. NRP, PVR....
Mr. PipeDreams
In the long run, maybe this sellout will have a healthy, cleansing effect. I claim there are/were far too many MLP units held by too few institutes. When they are forced to sell, prices get trashed. I'd like to see more units held by a wider range of diverse investors...hopefully that redistribution of equity has been taking place in the recent collapse.
Is JNJ, with its paltry 2.6% yield, a significantly better long-term investment compared to say EPD (yield: 8.2%)? What about the danger of Congress going after big pharma? Yet JNJ is flirting with new highs this week while EPD gets annihilated. It simply has to be market inefficiency. And that gets solved when MLPs are owned by a much broader investor base.
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