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Inergy, L.P. Message Board

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  • marklibera marklibera May 1, 2012 6:38 PM Flag

    what was the point?

    I think CHKM is a more typical G&P. PNG and NKA may be more comparable nat gas storage MLPs. NKA yields over 10% and PNG around 7.6%.

    Keep in mind that the NRGY share price will probably decline about $3 (or more) after the propane sale close to reflect the disposition of those assets and the lower distribution. Now that they've done their deals, I think the market is going to ask them to show their growth before awarding them with a premium valuation.

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    • I'm looking for a decline too, but it will be offset by the value of the SPH shares received as part of the sale. NRGY today is roughly $19; deduct about $4 in SPH stock you'll receive and your basis--and the market price-- is about $15. New distribution level is $1.50 so yield is similar to other storage MLPs.

      Management's challenge will be to avoid another distribution cut. They own a lot of shares and they aren't afraid to move their feet, so I think they'll meet that challenge. And then there's NRGM...