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Martin Midstream Partners LP Message Board

  • arbtrdr arbtrdr Jan 3, 2013 7:28 PM Flag

    Liza - Question please

    MMLP catches my eye every once in a while. Would appreciate your thoughts. PS - Pretty amazing 3 days!

    Thanks, ARB

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    • Suggest someone like rrb may have more ideas. I do have a small position but don't follow it too closely. Bottom line: it's a high yield, slow grower but doesn't have the strength of the big players like BWP, ETP that I know you favor in that category. Thus it would be more risky than those. They are however trying to move into more stable fee-based assets over time. You can get a nearly 10% yield but don't expect fast price appreciation so total return will probably be in the 10% ball park but with more risk than a similar total return at say BWP. Some potential for better growth a few years out but rrb could tell you in more detail if he is around - he pops in here once in a while.

      To be honest, I own units in some MLPs (generally those with higher total return including both yield and distribution increases) and tend to sell puts (rolled forward quarterly for additional premium) on many of the slowcoach MLPs (like BWP, ETP, etc) which have a good stable yield but little short term price appreciation. This would have been a candidate for the second category. The only reason I bought some units was at the time there were no options offered on MMLP and so the only way I could capture the 10% yield was by purchasing units. In the last year or so they finally introduced options, so if I came to it now, I'd probably sell puts rather than buy units. But since I already collected a number of distributions and don't want to pay tax, I'll hold onto it.

      • 1 Reply to lizahuang54321
      • I only casually follow MMLP. I had high expectations for them, but they continue to dabble in businesses that are on the fringe in terms of stability. Instead they continue to "be excited" about acquiring businesses that come with commodity sensitivity which they dump back on the GP.

        Not thrilled with the latest deal. Proably is relatively low risk, but as long as they buy fringe assets..the market is not going to assign them a yield under 9-10%.

        I don't see this as a growth name..but at the same time, don't see it as extremely risky. They do run with a low coverage ratio and the GP doesn't have many MLP qualified assets to drop down so that is bothersome...and they haven't grown distributions much over the past few years.

        If I were looking for a 10% yield, I'd probably go after VNR...

 
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