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Gabelli Utilities AAA Message Board

  • davcot@att.net davcot Dec 4, 2011 11:04 PM Flag

    MLP's or GABUX?

    Are MLP's better in the long run than GABUX,since from what I've been reading here on this MB that the GABUX distribution may or could at some future date be dropped by a penny or two?

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    • rip, truly remarkable geographical diversity. I'd sure hate to be on the crew that has to fix the potholes.

    • It's only 4% of the fund.

      Here's what they own:

      The motorway concessionaires directly and indirectly controlled by Atlantia are:

      •Autostrade per l'Italia SpA (2854.6 km of network under concession)
      •Società Italiana per Azioni per il Traforo del Monte Bianco (5.8 km), which manages the Italian section of the Mont Blanc Tunnel (Atlantia's interest is 51%)
      •Raccordo Autostradale Valle d'Aosta SpA (32.3 km), which manages the road linking Aosta and the Mont Blanc Tunnel
      •Autostrada Torino-Savona SpA (130.9 km), which manages the motorway linking Turin and the Ligurian coast
      •Società Autostrada Tirrenica SpA, which holds the concession for the entire length of the Livorno-Civitavecchia motorway (240 km) and currently manages the Livorno-Rosignano section (36.6 km). A 69.1% interest in this company is in the process of being sold;
      •Tangenziale di Napoli SpA (20.2 km), which manages Naples' orbital motorway
      •Società Autostrade Meridionali SpA (51.6 km), which manages the Naples-Pompei-Salerno motorway

      Plus interests in the following:
      Atlantia also has an overseas presence via a series of investments; the foreign companies that are currently directly or indirectly controlled by Atlantia are: •Stalexport Autostrady (57.28%) in Poland, a conglomerate listed on the Warsaw Stock Exchange that since 1997 has held the concession for the for the 61-km long A4 Krakow-Katowice motorway;
      •Pune Solapur Expressways (50%) in India, which holds the concession (expiring 2030) for 110 km motorway in the state of Maharashtra;
      •Ecomouv (70%) in France, a project company built for the implementation and operation of a satellite-based toll system for heavy vehicles weighing over 3.5 tonnes on a part of the country’s 15,000-km road network;
      •Electronic Transaction Consultants Corporation (45%) in USA, which provides system integration, hardware and software maintenance, customer services and consultancy in the field of free flow electronics toll collection systems;

      Autostrade dell'Atlantico (100%) and Autostrade Sud America (45.77%), which own a number of Chilean, Brazilian and Portuguese motorway concessionaires forming part of the Itinere Group, and that operate a total of 702 km of toll motorway.

    • rip, This might be the world's best investment but I'd have difficulty explaining to my wife that I that I am securing our retirement & financial future by investing in Italian toll roads. Might no longer have a wife. BTY does this include the bridge?

    • Thanks for the additional info; if you saw an earlier post of mine, I suggested looking at MFD, another Macquarie instrument; heavy into Australian assets, a substantial portion in Italian toll roads (that will be affected somewhat by a recession in Europe but not to the extent of having much effect on MFD), and several US MLPs.

      KFN has appeared on my radar as well, but I have enough mortgage-realted stocks already.

    • rpl,

      I have owned AT for a few months and I like their prospects.

      One that I'm give a stong look at is KFN, the financing arm of KKR. Pays quarterly

      "Diversified private equity firm KKR Financial Holdings (KFN) currently yields approximately 8.6%. This stock has attractive valuations trading at under a 5x P/E, .9x P/B, a return on assets of almost 4% and return on equity over 21%, with strong institutional ownership of 52.5% as of last quarter."

      2 things of interest:

      1)Management has been buying back its convertable debt as they think share prices will rise

      2)With the push to raise capital in EuroLand, there will be lots of opportunity as EuroLand banks unload assets (also why I like Macquarie Group MQBKY.PK (with a 7-8% yld) from Aussieland as they have a nice capital cushion to expand its assets, like its bid for the aircraft leasing portfolio of RBS)

    • Check into high-yield bond CEFs which pay monthly and have the current yields:

      NCV/NCZ (12.19/12.33%)
      MSY (9.37 %)
      PFF (7%)

      Or, this utility:
      AT (8.26%)

      Or this REIT:
      ARR (18.4%)

    • davcot@att.net davcot Dec 7, 2011 9:52 AM Flag

      I saw the hedges were only for 2012 which didn't impress me.Btw,I'm interested in monthly distributions.LINE only has quarterly distributions.
      Thanks Glenn.

      David

    • davcot

      Thanks for asking. I read thru the material and I will tell you what my gut says, because reading one limited article is not good dd nor fair by any means.....i did not see what pctg the ng and oil was, so caveat there....if its not at least 60/40, 70/30 oil vs nat gas, i would view it with more skeptimism...in addition, unless oil and gas prices spike up rather largely, your hedges here are not very good because they are limited to 2012....line for examplemaintains a rolling 5 yr hedge program at great rates....when economic times are bad, like we are entering, hedges provide a much smoother landing spot for pps and income. Which brings up the next question, are you in for income or appreciation? or both? trusts are normally income orientated and their appreciation is gauged heavily on proven reserves.

      the trust has a monthly distrib and decent yield...this is good....however, i believe bottom line that line or vnr are better...first line then vnr....both offer appreciation and distrib growth...line 8-10% dcf growth and 30 rev growth.....plus a very good oil/ng/ng liqs reserves...

      go to line web site and read last two presentations...that alone will show you all you need to help you make a good decision. if you have any questions, just ask....don't hesitate contacting jack hiller on line mb for even greater detail....he is the line mb guru....plus there are several others,,,,sandonthebeach47, moneyonomics, norrishappy....beyond me, these guys are top notch and will be open honest and frank....

      glty

    • Take a look at SDT ,an oil MLP,according to its prospectus earlier this year distributions are projected to rise in the coming years,this is my 2nd largest holding the payout is currently about 11%, high for a MLP but the share price should reflect about8%so lots of upside potential for the stock price to go up,their hedges are about $90 per barrel,good luck in whatever you choose

    • dave

      I would strongly suggest you read the boiler plate mlp-gp-idr verbiage in any mlp corp you may wish to invest in that has this corp structure. Basically, the mlp has written into it a caveat to all investors that mgmnt is not directly accountable for deals they may pursue that does not benefit the investors.....So, spend some time reading the mlp-gp idr relationships.....caveat-I am not suggesting any corp is under dealing the investors, (although there has been a few) what I am saying is that the mlp-gp-idr language permits such if mngmnt so desires without general recourse.....the question remains, is why does mgnt elect that structure over that of a LLC?

      I personally do not invest in mlp's with a gp-idr structure. I elect LLC's, for example, line and vnr. This way I never have to be concerned if mgmnt decides to deal a extra card to themselves or not...why add gambling risk to investment risk?

      Full disclosure- gabux is my 2nd largest holding behind line, vnr the third...That supports some of the opinions of other 's in this thread, at least, for now...


      Glty

      • 2 Replies to grothred
      • I stay away from mlp,ever since t.boone pickins lost everybodies momey in 1987.

      • gro,

        Another aspect is the performance "incentive" that is usual for the GP/MLP relationship. Many of these agreements will set a floor for GP's fees and provide for a higher fee based on higher payouts. For example, an agreement may state that the GP gets 25% of all distributable income over a certian level.

        My 2 largest MLP positions, EPD recently bought out their GP and DMLP has a fixed 4% fee regardless of the distribution. Before buying into an MLP it is important to dive into the fee schedule for the GP as it may greatly effect distributions over time.

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