We've been tracking $LNCO for some time, but have yet to take a position. Our investment thesis was that if the MLPs were hit by adverse tax treatment changes, depending on how written, securities like $LNCO and $AMJ should out perform the pure MLPs (even as the sector may underperform). But the tax law for MLPs survived unchanged...and as such, there is relatively less need for the $LNCOs and $AMJs on the incremental. So we see MLPs outperforming, and the pure outperforming the likes of $LNCO. And we see the technical mini swoon of $LNCO to continue to slide over the next two months into and beyond the lockup expiry and the debt limit talks.
Come March, we will re-evaluate. But for the near term, we are investing in the pure MLPs, of which we like the very beaten up $EEP.
You had a down day on the 31st of Dec it went down to below 36. I sold naked Feb 40 puts and got 4.60 for premium That makes my cost basis for the stock if I get or want to be put 35.40. Right now I am making money in the options should I cover. As long as the stock cointinues up I might just walk away with the prem come Feb. In any event my cost basis remains the same!Based on that my div % will be 8% if I become long the stock!!
If LINE were to outpace LNCO in pps, no harm because they both pay the same $ amount of div/distribution. LNCO would garner a higher yield, adding attractiveness. Both end up at the same place (not accounting for tax differentials).
If they track the same as KMP & KMR the MLP will pay a slightly higher dividend. I would like to see a price drop after the lockup expires but it would be very small.
I have no position at this time.