I have been accumulating LINE stock (units) ovr time - I am in it for the dividends (distributions) Thsy have proven to be a solid company - never missed a payment while I have been a holder - and i will leave it to the CPA's on how they account for their business - and I will continue to accumulate - especially in the down turns - I didn't buy it for growth potential - I bought it - and am buying more - for what it pays out every quarter - I have read the Barrons article - the Motly Fool - and others - most 'wizzards' still have LINE as a strong buy - I do enjoy reading all the opinions - and all are respected - mine is a 'buy'
I would wait until thursday. I am pretty sure the initial headlines are going to highlight a large earnings miss. By mid PM it is going to be pretty clear that distributable cash flow is ample enough to cover the quarterly distribution. After the conference call it should be clear that their hedging program is only intended to produce stable cash flows. In any one year they may leave some cash on the table but thier objective is clearly to make sure unit hiolders don't get bit by a cut in the quarterly distribution.
I dont get Barron's (used to but didn't find it useful) anymore. What is the difference (in annual $ terms) between amortizing the hedges as part of acquisition costs and expensing them?
That would depend on how much they spent on those hedges each year. In 2011 they spent $134 million. In 9 months of 2012 they spent $583 million and counting. In 2012, that hedge gained $281 million, or 55% of distributable cash flow of $503 million. Therein is the problem, "they are overstating cash flow available for distribution, by not deducting the cost of the derivatives-mainly put options"
Yes, but remember, opinions are like #$%$ holes. Everyone has one and most stink. In any case, read Barrons article. I would not be a buyer here. What good is an 8% distribution if you lose 10% per year on your investment. If you're looking at MLP'S, there are better options: EPD, MMP, PAA, KMP, ETP, BWP, etc.
Chucky, They all lose money....the key is the income fluctuates depending on hedging and commodity pricing. You need to learn technicals and trade MLP's. None of them are buy and hold as they trade with the ex-dividend and earnings dates. If you learn to read charts then you may make some money but as I read your post you probably need to start with investing 101.
Sentiment: Strong Buy