Couple of things - There is NO APL dilution, but rather a modest accretion. Also the moves are related to the pendulum moves in pricing on NGLs, NG and oil and people moving in and out of the segment. Suggest you stop looking at daily moves that mean little.
For the long term investor this will be a double in 12-18 months. They are simply a toll-taker on moving oil/gas around and storing it. No matter what the commodity pricing is, the oil/gas will still need to be moved. Their exposure to NGLs pricing is small. Re-contracting risk is minimal in the near/medium term. Once Atlas is executed, growth will return later this year. Plus, I believe oil will be at $60 by mid summer and $70-75 at the end of the year where it will probably stay longer term.
And ....... the CEO of Enterprise is not the type who likes to be told no. Enterprise will be back in a take-over attempt within a year.
Targa is a gift at these prices. But it your outlook is trading, much of the volatility has faded away.
Good luck longs!
Yea they predict a 10% increase in distribution but that coverage may also fall to 1.00 or below. Not something to panic about. If producers cut back production for any length of time (lower volumes for NGLS) or command lower fees those headwinds could be troublesome. Still like NGLS here long term. In 2 or 3 years it's hard to imagine both oil and gas not being significantly higher. LNG exports should push gas prices higher and the decline of rigs and the steep production declines of shale oil should help bring the oil supply/demand back into balance.
Not too shabby. 1.5x coverage. Clearly APL deal poorly timed. Won't be a major contributor for a while. Looks like Targa will trudge through 2015. It is times like these that investors should be happy that they choose to run with such a high coverage ratio.
They will likely manage to eek out decent distribution growth this year.
I cant understand for the life of me why when oil goes down this stock gets clobbered. It is not a driller. and it's not affectd that much from the commodity swings so why the slaughter?
Analyst Christopher Sighinolfi commented, "Despite 1) NGLS being one of the more commodity exposed MLPs under our coverage, 2) our expectation for Galena spot cash flows to materially weaken, 3) our expectation for mgmt guidance to be lowered and 4) a material hedge benefit roll-off in 2016, we believe the market has sufficiently risked its exposures and units now offer an attractive risk/reward; we are upgrading NGLS to Buy, from Hold, on valuation. Our DDM & Target Yield derived target prices remain $47 (NGLS) and $95 (TRGP)."
This sell-off is rediculous. As a value investor I look for yield that offers potential for substantial appreciation in share price. Now, I don't have to buy at the bottom, I just like to be close to it but I obviously missed this one by a mile. My average is now around $50/share in NGLS. I could average it down again to $45 at this price but until NGLS shows me some kind of a bottom there's no way I'm throwing good money after bad. Looking at the chart, I'd like to think we're at the bottom (AGAIN) today and will bounce off it but who knows?
For a midstream play with NGL production this is the most volatile LP I've seen. I can't figure out why a Midstream and NGL processor with no upstream or downstream exposure continues to get hammered like this. NGLS and EPD represent my midstream Nat Gas and NGL exposure while APU and SPH represent my downstream domestic NGL (propane) exposure. I want no upstream exposure in this environment but I keep an eye long term on Range Resources for upstream when Nat Gas rebounds. EPD holds its own, APU and NGLS are up nicely and delivering great yield while this pig rolls over in its own wallow yet again!
I can't figure it out. We have a glut of Nat Gas but we have more and more power plants converting to Nat Gas via mandates. We can't export domestic crude but we can export all the NGL we can process and pump. NGLS invested heavily in expanding its storage and port faciities in the GOM to export product and as a midstream and once it's on the NGL tanker it's out the door and sold. Furthermore, the export of NGL doesn't require grossly expensive cryogenic ports on both ends to load and unload and costly ships to carry it. Propane & Butane hold liquified status at normal temperatures and at much lower PSI. I have to believe as the 3rd world progresses that lacks nat gas pipeline infrastructure NGL's will lead the way just as they have in India. A billion people cook with propane in India!
I've crunched the #'s and added NGLS to my portfolio. However, I added it when it was on sale. SInce then I added more on FIRE SALE. NGLS has turned although recent action may make you think otherwise. We aren't at $39 anymore. We just need to wait for earnings. The sheeple expect the worst and when the dividend holds and the bad news everyone expects turns out to not be so bad or even in line with they thought it's time to head north again. The U.S. and the world didn't burn the last BTU of Nat Gas or NGL in 2014. This is a sleeper. Just sit back, collect the dividend and stop worrying about the valuation it is handed day to day by what has become a highly imperfect market at valuing companies. Thanks to automated trading and the influx of "kids" who now manage far more $ than they ever should, we have entered an era in which the Value Investor who researches can make an absolute killing. Just my thoughts.
Maybe the Easter Bunny will bring a 1 for 1 stock deal. Another day, another dollar down. You would think at some point, somebody would support this stock.
I wonder if some of the problem with this stock is the confusion of similar names as well as the recent acquisition of Atlas. I had a very hard time trying to figure out who owns what.
Just relax. There will be some turbulence with the ATLS midstream buyout, low energy prices, and all the financing, and refinancing. It may take another quarter or two for the performance to clearly stand out. I'm looking for at least a 2% increase in the next NGLS distribution and ~6% increase for the TRGP dividend. With its 3.25 million plus share offering, TRGP will be buying some $53 million of NGLS with about ~19% of the proceeds. Both TRGP and NGLS should settle down and show nice last eight months of the year price increases once the dividends/distribution continue solid quarter over quarter increases. NGLS a is STRONG Buy; however, I generally do not buy MLPs...only GPs of MLPs. TRGP is my number one holding.
Sentiment: Strong Buy
Seems like when this stock drops, it drops over a dollar? Does anyone know if this will drop further due to the ATLAS dilution?
I'm staying put. I wasn't pleased at $40 and certainly not at $37 but I think we've turned the tide. Very interesting comments by Rick Kinder who founded the largest pipeline partnership in the U.S. (KMI) Oil at $43 a barrel brought out the end users in full force... Not the speculators and financial players but the end users. At $43 a barrel every massive consumer of oil wanted to lock in contracts and guess what? No one wanted to write those contracts! Oil quickly bounced. $43 is the floor on WTI and I'll believe Rick Kinder anyday over the usual talking heads. Rick Kinder added another 100,000 shares of KMI to his own holdings at those prices and HE'S NEVER SOLD A SHARE according to CNBC. Natural gas and NGL's track oil so I am long NGLS for the recovery in energy. I have a place for this yield in my portfolio every day of the week. Wish I could have loaded up at $37 instead of $50. May average this one down now.
There is some 1BCF in new NG usage for pwer plants this year and more in 2016. 5BCF for LNG exports in late 2016 and 1BCF in demand from new industrial plants in 2016/07. Well are not being capped! Silly statement. Some have shut down, but will come back on line with the turn of a valve.
MLP's really aren't very suitable for trading. Too many tax complications. If I were you I'd sell and buy a
XOM, RDS-B or another major oil company.
Leave the MLP's to us "Old Farts"
Nothing but pain since mangement acquired Atlas. Should have returned teh capital to shareholders instead of investing in empty pipelines to capped wells. Time to short this to $25.