That would put EVEP at $30.
$35 would put it in the yield ballpark of the more mature E&P MLPs like LINE, VNR, LGCY with a little under 9% yield.
BBEP is over 10%, while some of the newer ones are well over 10%.
If this mean reversion continues, I see $35 easily.
And this doesn't even factor into the distribution coverage concern.
If they have to cut the distribution, who knows what the bottom would be.
Liza, I'm looking for good MLP'S to short puts on, preferably 12%+ yielders or at least 10%+. Already picked up QRE, a 12% yielder, from my calculations it should bring about 15%+ (time value included) rolling it quarterly. I'm Not interested in refiners or other variable distribution stocks.. Only stable and growing companies .
Your buy on APL was great, congrats on picking a multi bagger, are there any other multi baggers you are buying now?
Well, at the time of buying, you generally don't know it will be a multi bagger.
In that case of buying APL in the $2s, it was more a case of holding your nose and buying.
In fact most of my biggest gainers have been like that since they were knocked down so much and then rebounded. But you don't want to be only buying basket cased (which APL was at the time), the majority of your portfolio should be solid plays. I don't like to get into recommendations, however your suggestion of QRE is a good buy at current price/yield, I think. I would suggest don't limit yourself to E&Ps. The midstreams have been much better performers on total return basis (yield plus price appreciation) over the past years. I tend to use solid boring midstreams for my put strategy, rather than the 'exciting' E&Ps. My favorite candidates for the put selling and rolling forward strategy are ones with unit price which doesn't move much over the years - I prefer ones which don't fall for obvious reasons, but I also prefer ones which don't rise in price much as then when I roll forward I keep having to consider raising the strike. I prefer ones which don't move much, even if they don't pay as much in premiums as the more exciting ones.
I do not understand why some posters can't get beyond EV. Is it that important in your life? If so, keep at it. Whatever.
What is the truth about EV today? The company is damaged. But, one of the single most important problems with EV is that the lion's share of it's revenue comes from gas, both dry and wet. And pricing on both stink today. If you look at most EP MLPs, no matter the energy equivalent issue regarding production, most revenue comes from oil. In some the great lion's share. No so with EV.
EV's principal problem over the last few years has been the decline in hedge prices for dry gas and then the difficulty of hedging NGLs. They are open to the market on NGLs.
This has nothing to do with the Utica. It is a product mix issue. EV is historically a gas company.
Then, comes the Utica and everyone knows the trouble there. No need to go over that. A failure and a change in environment. I lost a bunch of money on options.
So, what of the future? I really don't care that much. Really, one investment is just not worth the worry.
At best, EV in about 4 fours will be a company that is growing the distribution nicely because they will have sold and redeployed the midstream assets. Value between 500 million and a billion. Until then, not much to get too excited about. The modest monies that will come from selling the wet gas acres will just be used up quickly in areas everyone knows about. Perhaps over the next 3-10 years the override could end up being very significant. The oil window might be worked out nicely. Wouldn't surprise me, these oil and gas geologists and engineers are flat good. Then, NGL pricing recovers very very nicely as the US exports all over the world. Then, just a bit of improvement on dry gas pricing helps quite a bit. Then, back to basics, make acquisitions.
I believe this company can recover and this episode end up being a distant fleeting memory, you forget, this is America, the land of redemption.