It's over for a minimum of 2 years.
NS raises guidance and we have a 40% drop.
Nothing can save the stock except time. Nobody willing to step up to the plate at 32 because they know it might be crushed to 15. Stock prices are based on supply and demand, not fundamentals.
Right now nobody knows how much supply is out there that is going to be FORCED into selling.
The company is now under book value and nobody wants to buy.
I bought MLP's for the dividend. I have believed all along that I can stand the drop as long as I have the dividend.
I am beginning to wonder what if? I know that gasoline is being moved and as long as that is happening, the pipelines are making money; however, with the price drop, you wonder how safe the distribution is??
I guess my comment/question would be this. "Can the MLP's put a cap on what percentage the dividend would be?" i.e. 9% or 10%. Are they required by law (like the REIT's) to return a certain percentage of the profit to the shareholders?
Simple question: IS THE DISTRIBUTION RATE SAFE?
If it is, then this is one of the greatest buying opportunities I have ever seen. I think most of us can agree with that.
But when something seems to good to be true, it almost always is.
It takes going against all logic and common sense to believe that the distribution is safe.
I sold. I hated doing it since I know that the Q3 earnings will be spectacular. Every time I think that these things are just ridiculously good buys, though, they drop another 10%.
I hated selling MWE at $25.10 a couple of weeks ago since it was paying over 10% at that price, was a blended GP/LP, and was executing well. I sold anyways, though, since I figured that it had also been a good buy at $28, $27, and $26 and yet that had not stopped it from hitting $25. MWE closed at $19 today.
Similarly, I hated selling ETE at the ridiculously low price of $22.01 a couple of days ago. Today it closed at $19.14.
I thought about buying CPNO at $23 the other day but decided against it. It closed at $19.50 today. Whew.
I could go on and on. I'm VERY glad that I bailed out of AHD, APL, ATN, ETP, EPD, EPE, etc. at much higher points (when they were also "ridiculously cheap", according to the conventional wisdom, but apparently not cheap enough.) I kept a few of my favorites (like NSH)...and paid for it.
SXL and NSH were my last two major MLP holdings. I would have probably sold SXL today but it pissed me off when the price kept falling faster than I could set the limit orders (without just totally low-balling the price.) In the end, I got so angry that I wound up buying more SXL at $34.75 rather than selling any. For at least a day, that trade looks good since it closed at $37.41. That $34.75 price gives an almost 11% yield (now - excluding any increases) on an LP growing about 10% annually, with one of the lowest debt ratios in the business, with very limited commodity price exposure, and with a largely fee-driven business. That's about as good as it gets but people could still care less. SXL was selling off like mad along with everything else today.
My line of thought regarding NSH is that they'll probably raise the distribution 12% (and NS roughly 6-8%.) That will have NSH yielding roughly $1.60 or about 10%. While that sounds good, there are MANY MANY other GPs with more leverage selling at a better discount. Granted, NS/NSH have less commodity price exposure since roughly two-thirds of their revenue come from fees, but whereas asphalt is doing well this year who knows how it will do next year and in this environment that uncertainty is not a positive.
I will not be at all surprised to see NSH jump up around $20 when the Q3 earnings are announced...but I also wouldn't be totally shocked if it fell another couple of dollars over the next week or two.
In the end, I think that if you're buying at these levels you're going to do very well over the long term but it's going to be a bumpy ride for at least the next several months.
This market is trading on many things, but fundamentals is not at the top of the list.
Whatever is cheap...can always get cheaper.
I have worked for TEPPCO for 27 years. I charted it and found that back in 1990 the stock dropped below $10. If we all would have refinanced and bought up the stock, we would be wealthy.
When I went to work for them I figured that I had about as secure a job as could be found. The last truck that goes out will be running on some kind of fuel that was probably delived via a pipeline. I jokingly said at that time, either a pipeline or soft drink company. I figure that whoever was driving that truck would either be drinking a Pepsi or Coke.
If the MLP's go under, so will everyone else. I don't like the drop but, I feel secure with the dividend. I am hanging in there for the rough ride but, at the end of the day, I do believe they will come back and while we wait, we are receiving a nice return.
I just think everyone needs some encouragement. I know I do.
NS will be back-not soon but back. Stock holders of NS are paying a High price for the Banks greed-How this crisis could be covered-up for so long makes me ....about the stock mkt. Tell me if I am wrong but lower gas prices should help NS and the economy. It is always darkest before the dawn.
We will get some encouragement when we see the earnings. I think they should make over $3 with the price of asphalt being at 700 per metric ton. I know it has fallen to 650 or so but so has the oil price. I think the estimates for the fourth QT are low also. They will paint a rosy picture of the future and up the dividend. I suspect we will see large insider buys after the earnings as they are frozen until then. I can not believe that they will not round up buyers at 10% dividends tax deferred.
I doubt he owns a truck. This is totally ridiculous. They will announce record earnings up the dividend already paying over 9% and people are buying Government paper at .38. I am out of buying power but i feel safe with the yield. better than the Government paper.