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Breitburn Energy Partners L.P. Message Board

  • johnbaumie johnbaumie Jan 12, 2013 7:27 PM Flag

    BARRONS Bounce Monday-50c-$1.00/unit. Maybe more.eom

    Baumie. GLTA.

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    • I agree with reasoning in article, but before we get too excited the barrons bounce lasts about a day or two. What sustains it is if we become more on the radar screen.

      Some recovery in NG future prices wouldn't hurt either.

    • Here is part of the article posted on mlp iv board by passandshoot

      "Barrons: How to Play It Safe—and Enjoy a 5.5% Yield

      Charles Lieberman, the founder of Advisors Capital Management, has developed a successful equity-oriented strategy that is geared toward investors at or near retirement and designed to provide generous income.

      That approach, called "income with growth," uses a mix of publicly traded securities, including master limited partnerships, real-estate investment trusts, and high-dividend stocks to construct portfolios that provide a yield to investors after fees of about 5.5%. This strategy has returned 7.8% annually since 2001, ahead of a 4.3% yearly increase in an 80/20 blend of stocks and bonds. The goal is to find stocks whose dividends will increase over time and therefore allow an investor to preserve principal during retirement. "Income with growth" is one of six strategies employed by Advisors Capital Management, a Hasbrouck Heights, N.J., firm that now runs more than $400 million.

      Lieberman, 64, was a leading economist at banks such as Manufacturers Hanover in the 1980s and early 1990s; he later teamed with Salomon Brothers' noted economist Henry Kaufman to form a hedge fund before launching Advisors Capital in 1999. As an economist, Lieberman appeared regularly in Barron's.

      Fearful of a sharp rise in rates, Lieberman generally is steering clear of Treasuries, mortgage securities, municipal bonds, top-grade corporate debt, and preferred stock. He believes that the housing recovery has a long way to go, and he has identified stocks he calls "twofers" that should benefit from a better housing market and continued low natural-gas prices.

      The firm manages client money in separate accounts. It has no mutual fund. It takes investments as little as $100,000, although portfolio customization requires a $250,000 minimum. For more on the firm's distinctive approach, read on.

      Barron's: How is the firm run?

      Lieberman: Our strategies are based on client objectives and risk tolerance, not Morningstar-style boxes like value or growth, or small-cap or large-cap stocks. We don't care about style boxes because clients don't care. They just want the asset value to go up, and so we organize our portfolio offerings from "growth" to "growth with income" to "income with growth" to "fixed income," to give clients a spectrum to choose from based on their risk tolerance and objectives.

      How many securities are in each client portfolio?

      Anywhere from 30 to 50. We buy individual securities and avoid the fees associated with mutual funds or exchange-traded funds. With ETFs, you get a whole gamut of securities—the good, the bad, and everything in between. What we try to do for clients is pick the best and avoid the worst.

      What's your annual fee? Is it around 1%?

      It's a bit more than that for smaller accounts, and it can be less for large accounts. We are less expensive than most mutual funds, even though we effectively are creating a personalized, tailored mutual fund for each client. There is no commission on our transactions. We are not a brokerage firm. We don't get paid by anyone other than the client, so our entire focus is on the client. We, in fact, are on roughly 25 broker/dealer platforms, including Fidelity's.

      Give us a sense of your strategies.

      We may use securities of the same or related companies in different strategies. For example, we own Kinder Morgan [ticker: KMI], which is the general partner of an energy-pipeline company, in our "growth with income" portfolio, and the higher yielding Kinder Morgan Management [KMR] in our "income with growth" portfolios. We own JPMorganChase [JPM] in our "growth with income" portfolios and Citigroup [C] in our "growth" portfolios for more risk-tolerant clients.

      "Income with growth" is your most popular strategy. How does it work?

      The portfolio has income as its primary objective. Growth of that income and growth of the value of the portfolio are secondary objectives. So, the universe of investments includes master limited partnerships, real-estate investment trusts, preferred stock, bonds, and dividend-paying common stock.

      What do you like now?

      We consider MLPs to be one of the most attractive income-producing areas right now. We like BreitBurn Energy Partners [BBEP], an oil and gas producer. Gas prices are very low, but the company has locked in a lot of its future revenue by hedging. Like many producers, it's shifting production to oil from gas. When BreitBurn buys oil and gas properties, it tends to hedge future production out to as far as three to four years. So there's a lot of visibility to the earnings stream, and that gives us confidence in the yield, which is 9.6%.

      What other MLPs do you like?

      Energy Transfer Partners [ETP], which has a yield of about 8%. It's a big company, a classic pipeline with lots of growth opportunities. It recently did a significant acquisition in buying Sunoco. Companies like ETP are doing a lot of investment in pipeline infrastructure to bring domestic oil and gas to market.

      What do you think of REITs?

      The popular parts of the REIT space, including shopping malls and apartments, have been bid up by investors desperate for yield, and they no longer look attractive. We have turned to some of the more esoteric parts of the REIT universe to get a little more yield. We like Sun Communities [SUI], which operates mobile-home parks and yields 6.1%. It's a little like an apartment play because many people forced out of single-family homes during the recession ended up in mobile homes. There are very few mobile-home-park operators....."

 
BBEP
7.02-0.04(-0.57%)Dec 26 4:00 PMEST

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