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Tuesday, December 16, 2008


S&P who was right there on top of things when Bear Stearns, Lehman, and all the rest got into
trouble. Well those boys are right there again as they put Atlas Pipeline Partners (APL) on creditwatch with negative implications. They sight falling crude prices might pressure cash flow and that they are already in a tight situation with regards to its leverage ratio and its bank covenants. The charts of Atlas tell us that the market has figured this out a long time ago. Certainly the Citigroup downgrade a number of points ago gave people an opportunity to sell at least 10 points higher on APL and 5 or more on Atlas Pipeline Holdings (AHD). Another example of an mlp laying in the wasteland.

Also this morning we have a story about a possible reorganization attempt at Semagroup LP (SGLP). The chariman of Red Apple Group, John Catsimatidis is known up here in NY as he runs Red Apple and Gristede's supermarkets. He is also been rumoured to want to run for mayor of NYC. The man is worth over 2 billion dollars so he is no small potatoes.

Not much else happening this morning but markets are firm ahead of Goldman earnings. Energy prices are higher after yesterday's strange day where crude was up over 3 dollars in the morning and then collapsed to an almost 2 dollar loss by days end. The Fed will also be a player as they make a rate decision this afternoon. I think once all this stuff is out of the way the markets could mount a solid rally. Unless of course we get a surprise.


SHK said...

I'm not normally given to speculating in penny stocks, but the fact is a lot of our MLPs are now in that range - under $5.

Investor Village ( ) has prognisticated that CEP's distribution will be reduced to around $1 per share in 2009 and they further think that it would be medium-term sustainable. It takes into consideration some important variables.

That would make the yield around 30% going forward.

Does anyone have any convictions about the future viability of CEP and whether there is a strong case for further distribution cuts beyond those expected?

Bruce said...

If you want a high dividend, I think you'd be better off--long-term-with MWE and CPNO ( I own both).Both are G&Ps yielding around 20-25%. It is possible that eventually they may need to cut their distributions if nat. gas stays so low, but I think they are better long-term plays than CEP.


SHK said...

Thanks, Bruce. I do own MWE and CPNO already. Just looking to bump the overall yield a little bit.