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Inergy, L.P. Message Board

  • marginmaker marginmaker Dec 5, 2005 5:35 PM Flag

    NRGY Opinion

    Did I hear correctly on coference call?
    1)Nrgy had approximately 10% decline in volumes that they attribute to either conservation and/or (?) that were unexplainable.
    2)They don't believe in organic growth?

    It would appear that they are not growing their volumes but growing margins and cutting expenses to arrive at the bottom line. If they stop throwing more capital at aquisitions the real NRGY will be seen. Just an opinion.

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    • Don't necessarily agree with your conclusions.. might want to download the presentation given at the RBC Capital conference on Nov 17th 2005. In any event, interested in more in the unit holder dividends than capital gains.. Not too many American unfortunately are experienced in owning MLPs. A better model to follow in terms of what this type of investment might provide over the long haul is the Canadian Income Trust sector. Make one comfortable to have a fat dividend check delivered every 30 days --- so stop sweating the small stuff.

      • 3 Replies to caanalyst1
      • Disagree.
        If you are interested in the short haul then dividends matter more than capital gains. But 15% tax is very attractive...
        I was merely pointing out that NRGY is a moving target in terms of aquisitions/expansion but some of the management comments would lead me to believe that there are some problems in customer retention and 10% is a whole lot of customers.
        Don't forget that the MLP sector has a Cornerstone Bankruptcy in its past and they grew very fast also.
        NRGY perhaps is a good bet for the next year or two but longer term for continuous dividends with the possibility of strong capital gains I like ETP.
        What good are dividends if the company stock looses ground? NRGY management said in the conference call that "unaccounted for volume decline of 10% could not be identified". The positive spin is they have not included these lost volumes in their next year projection. Pretty scary...either they have no idea and should know why the loss occured or they know and don't want to say. I beleive that they price through the roof and expect losses. Also the comment about they don't believe in organic growth?
        Performance equals investment return including dividends and change in unit value over time not just dividends.
        Also just to share, I have held three items in my portfolio over time, SPH, APU and ETP (HPG). The only thing holding me back on NRGY/NRGP is what management says in the analyst calls.
        I would consider myself as a very cautious, conservative investor and like the MLP group as a whole. I am awaiting the ETP GP offering that was filed. Anyone have an idea as to timing?

 

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