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NuStar Energy L.P. Message Board

  • kerfinator kerfinator Sep 25, 2009 2:25 PM Flag

    Buy, Hold, and "Peek" strategy a loser

    Try that strategy here with new money and find out real quick what's in store.

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    • NS has underperformed all year long up until the last 2 weeks.

      The inclimate weather was blamed and then government's lack of funding in time to do their shovel-ready asphalt projects.....

      Either way, 2010 could be a remarkable year for NS. Citi believes this and the recent runup in NS in fact has outperformed most of the MLPs over the past 2 weeks.

      My guess is that investors who have missed this run are not going to be happy in 2010. I wouldn't buy in at these prices (yields) myself but I suspect there are a lot of chasers that have CDs maturing that will be looking for yield AND tax deferral in 2010 as a prelude to higher tax rates in 2010 and 2011 and beyond.

    • You guys do not really give any specifics. From my standpoint a 7 or 8% return at today's price is good. The dividend is backed by solid earnings with oil storage in high demand and the road projects that require asphalt. So tell me, what is going to so drastically change that the price will drop into the mid 40's. High interest rates? Oil at $40 per barrel? Obama asphalt money a lie? Huge drop in gasoline demand because people in Texas quit driving trucks? Weather in December all of a sudden warms up and natural gas demand suddenly drops? People continue to love the 0 interest rates and will never look at a quality stock as a means to make it back up?

      I could go on and on but my point is a lot of things have to change very quickly to affect the price of this stock.

      Right now I recommend a hold on this stock. Just keep it and collect your dividends.

    • If you say that it will not happen soon, you may be right...but eventually it will happen. We can both agree on that.

      I will wait patiently.

    • Kerf,

      I have been here quite awhile and you have been saying NS is overvalued in the high $40s.... I accumulated high $40s to $52 and have four dividends over $1.00 in my belt and it will keep going.

      NS had a difficult year with the weather problems slowing down and stopping projects. Supposedly in 2010 some big money kicks from stimulous into road work meaning some good asphalt sales.

      I would not buy here either but your posts going all the way back to the high $40s suggest you define value way below where true value really is and in the process you have missed $7 up and four $1 dividends.

      These MLPs are not trading vehicles. I think you have to take a stand and buy for the long term.

      Yes I would wait for it to fall because it does appear too high but I have my full position. I think you are waiting for a price that will not be achieved anytime soon.

    • >>>>Try that strategy here with new money and find out real quick what's in store.


    • i am looking and ready to buy. where would you buy in here? i am not too familiar with this. thanks for your help. i really appreciate your conversation. i like this board. no name calling etc. thanks

    • The Dow averaged about 5.5% anually starting in 1895. So if the Dow is to maintain that average at the close of this century 2100-that would put it at over 2,000,000. Thats right MILLION-the power of compounding! And you could also do better by keeping the losers out of your portfolio, and hold the winners like NS.

      The point is don't you want to ride the average rather than fret about a tiny corection. Buy and hold wins.

    • Indeed, the results weren't spectacular, but the main point that they drove home was that the distribution is covered entirely by the non asphalt operations. This is huge as it means the low risk, stodgy pipelines and terminals generate enough cash to pay the distribution leaving the asphalt division cash flow, which is volatile, to be dedicated to either expansion projects or debt repayment.

    • I view my investment in NS almost like a high yielding, high quality bond.

    • Short term calls are of no use in an investment like NS.

      My knee-jerk reaction to earnings were that they sucked but when you listen to the cc and realize that the distribution is fully covered by non asphalt ops then you can see incredible earnings potential in 2010 when the big wave of infrastructure stimulous will translate into lots of highway work meaning lots of asphalt sales.

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