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Inergy, L.P. Message Board

  • honoranpride honoranpride Jan 17, 2010 7:13 AM Flag

    Question

    Did anyone listen to their recent conference call, regarding recent aquisitions. I ask because I am looking at this stock but suspect they will have to do an offering to pay for recent aquisitions, hoping for a better entry point, maybe 34.00. Did they discusss financing for these deals?

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    • Better jump on this offering at $36.20 if you are looking for an entry point.

      I bought into KMP's last offering in DEC at $57.08 and am quite pleased.

      Offerings are a great jump in point and thus far all MLPs that have put offerings out in the last 30 days see their shares well above those offering prices.

    • They announced an offering after the close of trading. Probably will price some 4% off of today's price. This offering should not be a surprise to anyone who follows any MLP. This is basically the model-- buy or build a project, use the credit line to pay for the initial acquisition, then offer debt and term debt to pay down the credit line so that it frees up capacity for the next acquisition. Rinse and repeat.

      If you are interested in NRGY, tomorrow is your chance to buy it cheaper. I would bet that the price rebounds within a few weeks if not sooner (that was my experience when I bought at their last offering last March).

      You might, however, consider buying the gp, NRGP instead. A slightly lower yield, but NRGP is expected to grow that yield at over 20% EACH YEAR for the next 3 years. That should take their distribution to over $5 or more. GP's tend to trade at around a 5% yield, so a $5 distribution could get you to a $100 stock price. They should announce the first quarter distributon in another week. GL

 

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