Just as ETP and Inergy held on to propane too long NS has sunk this company on an assphalt bet.
NS has been absolute dead money except for its exceptionally high yield. High yield doesn't cut it when you have too much capital tied up in asphalt and your competitor MLPs are moving forward on NGL initiatives.
I agree that the big bet on asphalt in 2008 was a big bust. I think it won't take the company under but it will stunt growth for a long time, as increasing cash flow from storage and transportation is offset by shrinking asphalt refining earnings. In the End, asphalt will probably be worth zip but that may be a few years out.
NS is to asphalt as ETP was to retail propane. ETP waited way too long to sell. I would suggest NS dump this division when there is an upturn in government spending on roads and get a lot more than they would get now but less than if they try to guess the next cycle from peak to trough.
Even if NS sells asphalt tying up their capital in this nonsense investment while the peer group grows pipeline systems, G&P systems, etc..... I owned NS in 2009 and rode it up off the bottom and sold in 2010 for about the same price it sells for today.
Bottom line. Management was not a good steward of shareholder equity and will remain a laggard in the bigger game of NGLs because too much capital and equity is tied up in a business too tied to government spending at a time governments have nothing to spend.
i can see their barges unloading asphalt on a daily basis as i have to drive by one of their facilities. their making big money on it, and they only get the warm months of the year int his area to pave. that plant is super busy from april to ocotober.