NTI is totally dependent upon ONE refinery. It burps, NTI burps. Think what happens if it explodes or something like that:
RIDGEFIELD, Conn., Aug. 12, 2013 /PRNewswire/ -- Northern Tier Energy LP and its subsidiaries (NYSE: NTI) ("Northern Tier Energy") today reported results for the second quarter ending June 30, 2013.
Net income was $63.9 million compared to $245.6 million for the second quarter of 2012 and Adjusted EBITDA for the second quarter of 2013 was $85.9 million, a decrease of $160.4 million compared to $246.3 million for the second quarter of 2012. These decreases were driven by a 32% decline in refinery throughput due to planned turnaround activities that resulted in a full plant shutdown for part of the quarter. Tightened crude oil price differentials also contributed slightly to the decrease in Adjusted EBITDA
Refineries do explode from time to time. One near me (the Chevron in Richmond, CA) did a year or so ago.
If NTI refinery has a serious explosion requiring long repairs then expect years of no distributions and the unit price to drop to maybe $2-3.
That's what makes it high risk (beyond just being dependent on commodity prices and so very variable).
With a single refinery or fertilizer plant, a single unpredictable event could wipe out your investment. Which means you shouldn't make it too big a part of your portfolio.
I've been short since they were $30 per share but I think it's time to cover. There's not much downside at this point. The next 6 months may still be a little rough but the refiners should return big time profits in the future. I'll consider picking up some shares if NTI gets down around $20.
Just so you know durak, they are a 2 "trick" pony they also operate about 120 gas station/ mini marts. They make about .08 per share every quarter off the retail operations.
Please keep shorting so my rolled dividends will get me more shares. Thanks. The great thing about NTI is the lower the share price, the better the re investments. The higher the share price, the better the short term capital return. If the price stays the same, I guess I'll have to live with a 23% return. Only real risk is the refinery being flattened by an explosion. I'll take those odds.
Boy, the reality of a ONE refinery company is sinking in.
Dumping from every corner.
Sorry Old die hard loonies, you LOSE, again - Wait.
Loonies really had nothing to invest in the first place, just gumming their garbage in loneliness.