Sun, Dec 28, 2014, 10:38 AM EST - U.S. Markets closed

Recent

% | $
Quotes you view appear here for quick access.

Atlas Pipeline Partners, L.P. Message Board

you are viewing a single comment's thread.

view the rest of the posts
  • bosox_pats bosox_pats Oct 31, 2011 10:08 PM Flag

    Nov. Distribution

    I would swap my APL shares for ATLS shares at this point (I only own ATLS). ATLS IDR's will be 100% in the money as soon as this 4Q given the strength of APL's cash flow. ATLS distribution will probably rise from $0.24 to $0.27 in 4Q and then ramp to $0.35-0.40 given the timing of payments from APL to ATLS. ATLS is currently covering it's distribution by 1.6X. I believe they are going to use some of this excess when it spins off 20% of E&P business into a new MLP. (The IDR's ATLS will own with new MLP are structured almost exactly the same as APL - IDR kicks in at $0.45 distribution per quarter). Once ATLS becomes a pure play IDR GP MLP play, it will be able to distribute nearly all it's DCF. Given the leverage to the IDR's, it should trade at a premium to APL, perhaps down to a yield of 4%........like where it is trading right now. Lastly, I think ATLS will create value for ATLS unit holders with 20% spin out of E&P business - it will quickly cover the ex-dividend gap of spin-off as it takes it DCF coverage down from 1.6X to something closer to 1.1X. You have the potential for 1 + 1 = 2.5.

    So, by the 1Q one could have a $1.60 annualized distribution for ATLS, and if it trades to a 4% yield, the units have upside to $40 over next 6 months. Furthermore, the GP of APL, ATLS, owns over 5 MM units of APL and the management of the GP (the Cohen clan), owns mostly ATLS units of around 800,000. You may not like them, but they are money makers, and I would want to own exactly what they do as this story evolves...

    Perhaps the trade is to swap a portion of APL units for ATLS units. You can swap 1:1 and take some money out of the trade at same time given the dollar price difference while getting more upside per unit.

    In any case, a very bullish story developing across the Atlas trio of companies......

 
APL
26.45-0.10(-0.38%)Dec 26 4:02 PMEST

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.
PG&E Corporation
NYSEFri, Dec 26, 2014 4:02 PM EST
Rice Energy Inc.
NYSEFri, Dec 26, 2014 4:02 PM EST