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Boardwalk Pipeline Partners, LP Message Board

  • telarza23 telarza23 Feb 10, 2014 11:30 AM Flag

    Target after the downgrade is 20$, this is a great bargain at this level !

    "Credit Suisse downgraded Boardwalk Pipeline to "underperform" from "neutral," lowering its target price to $20."

    Sentiment: Strong Buy

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    • What is so great about an MLP losing 30% of its value. That means anyone who has been in this stock for four years has basically zero return with all prior distributions having no meaning now as they simply offset one day's huge capital loss.

      Here is the deal. If you don't own best of breed MLPs then this is the risk people took for what...? 200 basis points of yield? Is it worth it? While there may be an opportunity later on in BWP there is no catalyst to stay in it currently. Better off buying into another MLP with 20% upside and a lower yield than get into BWP which officially starts its dead money period for who knows how long.

      If the WMB/BWP JV does not work out there will be trouble. WMB got into a deal with APL a few years ago in Marcellus and APL couldn't honor its commitments in a timely manner. Chevron bought out APL's interest for a pretty penny that turned out to be too much paid for it.

      What catalyst am I looking for? I want Loews out of the MLP business. Better for BWP to be run by a GP that is completely devoted to energy infrastructure rather than Loews for which BWP is incidental to the whole of Loews conglomerate.

    • A 40 cent dividend at $20 would be a 2.00% yield. Not acceptable for an MLP. I think the conference call left the door open for continued lower renewal rates in the future . . . putting further pressure on future cash flows.

    • If they thought there was more risk then they would drop the target price well below $20. But they didn't.

      Sentiment: Buy

 
BWP
17.02-0.34(-1.96%)2:52 PMEDT

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