Bought last July as an income vehicle as I was very tired of my money market yielding .01%.
Got in at average cost of $18 and enjoyed the distributions since. I never really expected the cap gain component, which is ~20% from where I bought plus about 9% return on distributions.
So I am up ~30% on an income producing vehicle in a bit less than a year. What a terrible problem! ;)
Considering selling in hopes of buying back around $19 expecting some measure of correction in commodity prices. And maybe taking proceeds and playing in the LNCO sand box thinking it looks a lot like BBEP a year ago where cap gains boost to distributions could be sweet again? Appreciate any thoughts.
Don't sell. Use the income generated to buy aditional shares should it correct. Just keep reinvesting and don't try to time the market. Once your distributions equal your cost basis, sell and after 31 days buy back in and rinse repeat. MLPs are really great investments.
If everything goes according to plan for the next few years, considering how the company is currently positioned, I doubt you'll see sub-$20's again. Remember that these upstreams are all hedged at least a few years out, so they're insulated from commodity prices for the most part. I think the market understands that these days (I could be wrong).
But, Q1 was a disappointment, I may temper my enthusiasm (and cut back some) if we don't see a really hot coverage number coming up, because there are no excuses, the weather was fine, prices were good, and they did not have to sell a bunch of units, they upped the debt target to 3.5X adjusted EBITDA. Recall what kind of coverage they were talking about in the fall, if we don't see a 1.2 number . . . well, I won't like it.
In the meantime, I was just thinking the same as you, what to do? Not with my units, but with my calls. I decided to take out the short-term positions, not much gain left there, but I'm holding on to the Jan 15 positions. Boy, did I screw up not buying more of those. It was so obvious . . . now.
Obama just gave the gas industry a big boost this week.........prices are not likely to stay this low per MCF as coal continues to be penalized in the USA. I would go with the flow and not try and overthink this. My basis cost is about 18 too but I sold 6/15/14 "20's" puts a while back for $2.55 each and 1/15/15 "17.50's"puts for about the same amount so this has worked out great for me. SOMEDAY in the not too distant future I think we will see higher natural gas prices and these stocks will look cheap..........I would sit on your gain.........continue to collect your dividend.......and keep a close eye on BBEP distribution coverage ratios and production levels.......I think this is a good time to take a little risk with these stocks. Also own Vanguard, Kinder Morgan Inc., KInder Morgan Energy, Linco and Linn Energy..........all this JMHO.......good luck.......
Me too, Blue, I`ve got a very substantial gain in ACMP, these pipe line Co.s are making a killing right now, which are in the right locations. Some give CLMT a thumbs down, but this is going to recover, pays a nice distribution, You might be interested.