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Linn Energy, LLC (LINE) Message Board

  • sandonthebeach47 sandonthebeach47 Dec 12, 2012 9:14 PM Flag

    Yield comparisons.....any thoughts

    LINE yields about 7+%

    ALDW that was recently mentioned by Jack, stagg, & william and yields about 25%

    CYS now has a div of 0.40, plus a 0.52 special div for a one time, anual yield equivalent of about 28.3%

    NTI seems to have an absurdly high yield depending on who you believe of as much as about 40% and paid $1.48 in Nov. so far.

    Has anyone compared these?

    And,

    Does anyone have more info on NTI?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • You following my tips now?
      It was me who first alerted the board to NTI and ALDW (although I choose not to invest in refiners as I can't own everything).

      • 1 Reply to lizahuang54321
      • Was it you who thought that QRE had "promise" last year (we can go back and read your post) or something like that?

        ...so lets see the actual results from a year ago..... the Total Return for QRE since last December even after 4 dividends is using an online (buyupside) backtest div reinvestment calculator is
        -11.28%

        If you think that anyone should be ... "following your tips"..... you may want to first go re-read some of your posts.

        Then you should also post why you think that might make sense, because if someone had listened to that QRE comment they would now have a loss
        of about 11%.....right?

        And, you said that they had no incentive fee, then said no IDR, then said a few more things about it ....etc.....

    • Sand on the beach, There is a very knowledgeable poster on ValueForum on these small midcon refiners. He posts about the implications of crack spreads and the relationship between syncude, Bakken, WTI and Brent very often.
      Apparently NTI can hedge these huge spreads and has the ability to switch very quickly between sweet and sour crude to take advantage of the spreads. I could not begin to repeat all the stuff I have read and tried to learn about these refiners, but he seems very very postive on ALDW and NTI.
      He has brought RNF to the board at half the price it is now since it relies on NG for example.
      VF is not a free site though. I like it, but it's not for everyone.

      • 2 Replies to ibpawnin1
      • jackhiller@ymail.com jackhiller Dec 16, 2012 12:24 PM Flag

        NTI's first dist included earnings from more than one quarter, but casual retail investors projected the dist to continue at that rate, and so have traded it to a price too high. ALDW appears yet to offer a great yield for the share trading price.

        Avoid MORL, because its stuffed with agency backed MREITs that continue under earngs decline from the forever QE3 (and its leverage makes reduced divis even more treacherous).

        Although the hybrid MREIT AMTG just cut its regular divi, MTGE and NYMT just declared unchanged divis. WMC is soon to declare, and bet they continue unchanged, plus a year end extra, based on recent heavy insider buying.

        PSEC may be worth DD as a large investment firm with its divi just upped and yielding over 12 %

      • ibpawnin1 = sandonthebeach47...Same spammer different ID..LOL

    • Sand,

      I attempted to post but it would not go.

      No time to mess with it more.

      • 1 Reply to norrishappy
      • Yes weather is warmer than expected. But it seems the economy is slower than the analysts assumed on demand.

        The dishonored general press is putting a big happy face on some at best mediocre to negative economic news. So it could get really crazy in these heavily individually owned MLPs to year end if something 'scary' occurs.

        The damage from the 'fiscal cliff' is not just the event but business is not investing until this is resolved and the best case is therefore most likely a very soft patch in 2013.

    • Hi Sand,

      I am not going to bother doing an in depth analysis on these as they simply do not fit into my investment philosophy.

      However, generally these high yield partnerships have extreme yields simply because the market does not believe it is sustainable. 99% of the time the market is efficient enough; over a reasonable amount of time, to get this correct. There are exceptions like the Terra Nitrogen fertilizer partnership which ran into the glut pricing of American natural gas and a delayed and still muted willingness of competitors to make the necessary investments in new capacity and eliminate economically excess profits. The ethanol corruption around corn which demands massive amounts more fertilizer than other crops is significant as well.

      The refining business has been distorted to completely insane levels by EPA regulations of intense localization and resulting inefficiency. These stand alone refiners are minting money simply because they have access to discounted American oil.

      As result we are beginning to see some sustained pricing differences in regions of America for gasoline. But also as the market is so distorted switch overs to bogus season blends and a question number of accidents limiting supply at critical times obfuscates changes in regional pricing. So sadly these refineries are blocked by various government regulations and crony capitalist localization for effectively competing in the full American market. We should also note Therefore the money is minted by having the gasoline priced against competition with feed stock based on much higher Brent prices.

      Add that these small mlps do not attract much active analysts coverage. So the trading is quantifiable less efficient than the general market. Whatever ones opinion of technical analysis it is built upon the assumption of market efficiency.

      In short individual investors are working without a safety net in these highly specialized and focused bets. It is no placed to be the half informed investor going off 'information' Wall Street retail carnival barkers. Given that there is no margin of safety but rather special circumstances based primarily on government action these do not have an marginal of business model safety.

      This is no place to be taking advice from the clowns. Given the smart informed money is bundling it up and selling it to retail 'investors' the random odds are not favorable either. Like closed ended funds these are best bought no when things seem great but when available at a discount to net asset value.

      But in general these things are no place for individual investor who do not do a complete balance sheet, cashflow, income statement review and prepare their own forecast. Given that trading is by definition not efficient the idea that buying and selling can be timed based even on fundamentals it a function of delusion.

    • ALDW and NTI are both variable yield MLPs which may or may not live up to the projected yield they propose. Todd Johnson (SA) did a good write up on both of them in SA.

      Playing the "special dividend" trade is a fool's game - you simply will get back the money you invested before the end of the year and is not a continuous event (unlike what PSEC did where they increased their monthly dividend by 12% this month instead of making a one-time payment).

      If you are interested in a speculative high-yielder, check out MORL, which is projected to pay a 25% return with a monthly coupon.

    • Line hedges its bets...very safe these others are vegas odds.

 
LINE
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