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Whiting USA Trust II (WHZ) Message Board

  • bananabb bananabb May 24, 2013 5:32 PM Flag

    Need another BIG dividend play... any thoughts on NTI ? (no spam, want opinions)

    Hi Everyone... Im long 2500 WHZ and now am looking for another decent dividend play. NTI is paying $4.92 a year... its a refinery adn has recently gone public (some what recently) ... any thoughts? Thanks in advance

    Sentiment: Hold

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    • CVRR paying 23% divy

    • ROYT, refining, perpetual trust paying 9.5%

    • morgantwo May 26, 2013 4:53 PM Flag

      Also, bananabb, there's another company I've been considering recently - Oxford Lane Capital. It's annual yield is just short of 13%, and it's not an merit but a financial business development corp. which invests in small to mid-size companies. Depending on how big a dividend you're looking for and where in your schedule you want the payout, Oxford Lane fits into a dividend scheme of March, June, Sept, Dec..

    • plains pipeline website has topbar customer center box drop down with oil prices so u can see daily prices paid. not sure % of bakken oil shipped thru plains but hard to get daily prices for bakken oil. last week avg $82-84 a barrel. I have 1300 shares if price holds up that would be $5 more a barrel than last quarter might buy more. also do not know % of whz oil from bakken but chart gives all states prices paid.

      Sentiment: Buy

    • The parent company of NTI believes it is time to sell not buy. They have made two big sales of their units in the last 6 months or so.
      Refineries like that are boom and bust. Right now is the boom. Which means you are buying high. The spreads which made them so profitable in the last few quarters has already narrowed significantly.
      The parent knows this and that is why they have been a seller.

      On top of which NTI and ALDW are single refinery operations. One big explosion (which happens often at refineries) and they are out of operations for an extended period, which would mean halt of distributions and huge drop in price). Decent short term reward but very high risk.

      • 5 Replies to lizahuang54321
      • Who is the parent company of NTI? ALDW is ALJ, but do not know NTI. I read sometime ago that it was a Canadian fund? never got the name?

      • Lisa, NTI and ALDW are MLPs. Yes 1 refinery each a pipeline and a distribution network. Both have a refinery Nelson rating of 11 or better. This means they can handle WTS and produce high cost distillate. Yes their profits derives from the Crack spread. I believe this crack spread will be around for a long while, even with new pipelines. Also and important, the WTI from most of the shale play is not truly a WTI, this crude is above 42 API the standard API limit for WTI. This means that GOM refineries lose diesel production, which is the export demand. NTI and ALDW are well placed to profit from these new so call WTI. WTI will continue to be discounted, my guess the equivalence of the lost diesel production. LLS is the best 3.2.1 for the money.

      • thanks liz.. this is actually scary news to me and will do more DD before putting a nickel into them. I also noticed they own stores... a web site that play up the idea they are all about OIL then to see daily bargains on HoHo's was odd :)

      • Right it's much better to buy a trust like Ect at 20 the way you did and watch it go to 10. Nti will pay a strong yield for years to come.

      • morgantwo May 25, 2013 1:02 AM Flag

        NTI is an independent company that went public only last August. I don't see evidence of a "boom & bust" dynamic but rather a gradual rise to a high a little over a month ago & now settling into a lower price level. Perhaps one reason it offers some revenue stability is the fact it also owns more than 230 convenience stores.
        Yes, the refinery could explode; that's certainly one of the risks of oil & gas, so I take that seriously (as in all of that kind of investing).

    • morgantwo May 24, 2013 6:33 PM Flag

      NTI appears to have good revenue sources & I've been very interested in it, too, as well as ALDW (if you really want to stay in the petroleum side). I've been alarmed at how steep the drop-off has been in WHZ's pps so early in its life, so I know I'd be in NTI or ALDW if I could free up the $$. Good luck to you.

      • 1 Reply to morgantwo
      • NTI appears to have stable revenue from sources other than the refinery. The refinery net income can be quite volatile due to spread variations. Employees at a refinery are quite aware of potential danger from refinery work and are alert thus explosions will not be the main reason for refinery temporary shut down but there are other reasons. Turn arounds are typically done once a year for a month or more depending on the purpose whether regular overhaul/maintenance or change in product emphasis. Now it appears the spreads are narrowing thus I will stay on the sideline here.


        Sentiment: Buy

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