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QR Energy, LP Common Units repr Message Board

  • slegermark slegermark Feb 21, 2013 2:47 PM Flag

    It should bounce back within two weeks when earnings are posted.

    The recent acquisition will have added to last quarter's revs.

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    • Recent history has shown repeatedly, that companies that pay an outrageously high yields in this case distributions, do not perform well, at $1.95 yearly rate, this stock has to perform at a growth rate of 11% in stock price just to break even, 2nd reason to be cautious - the amount oil & Nat gas production in the USA is increasing at a rapid rate year over year, thanks to fracking and other technological developments, pipelines are being developed also at a repid pace to transport this recent oil boom, market prices for oil will begin to drop as the oil boom continues and a glut of light sweet oil embraces our country, lower oil prices will devasate companies like QRE and the $1.95 yrly distrib amt will precipitously fall,, invest in pipeline companies and do nt be fooled by high yields that are not sustainable...

      Sentiment: Sell

      • 2 Replies to eagle190000
      • Hello? It's not an outrageously high yield 11% for an upstream MLP is not that high. Most of them are around 10%. Probably none below about 8%.

        "at $1.95 yearly rate, this stock has to perform at a growth rate of 11% in stock price just to break even"

        and that statement is total gibberish. Apart from how much they raise from SOs, it doesn't hurt the company if the unit price is lower. Many MLPs were at 40% yields during the 2008-9 meltdown and the vast majority maintained distributions and many kept raising distributions through that whole period.

      • Does the fact QRE is hedged out 2-3 years, recent purchaes/dropdowns have increased production, or that management believes coverage ration will be 1.2-1 enter into your calculations?

    • Let us hope!

      • 1 Reply to wardsown
      • Depends on the coverage I think, the full effect of acquisitions may not have phased in yet, while the unit increase has. I'm not concerned long-term, all my dd indicates management is competent and the company well positioned. But while the long-term coverage should reach management's stated goal, quarter to quarter there could obviously be down numbers, for all manner of reasons. If Q4 numbers were to disappoint, I would see any drop in unit price as a buying opportunity.