MLP's designed for asset growth. I think this one has the keys for that to take place without massive dilution down the road. I bought MWE at $41 now trading near $70 with a decline of dividends. Can't grow on the same curve as the past two years. CLMT still growing assets, but expensive with debt. The growth factor from MLP IPO's has historical growth history. This one has many assets jointly owned by major players joined to Phillips 66 with shared asset ownership.......ripe to spin into PSXP. Take the time to research some of their shared holdings.....Duke Energy's Spectra Energy is one that comes to mind. It's all about asset control of resources and vertical integration.....upstream, mid-stream, and downstream to feed the refinery to end customers. Firm control of the supply chain gains significant cost advantage.....oil & gas inventory and supply control determines the market price of the commodity.
You make a good point but once higher interest rates kick in, of course, the stock market will sell off. PSXP will have essentially 0 growth for the first 12 months or so as per the prospectus. No growth in the short term coupled with rising rates on the agenda? I am a value investor and for me, I am more than willing to give up some short term gains. I am not smart enough to be able to tell you when the sell off will hit. This week, I went to 95% cash. PSXP is just one of many I have on my watch list and will wait for the price to come down to my entry point. I am in good company, as I noticed Warren Buffett is setting on $49 billion in cash as he cannot find any value either. This is, by the way, a record cash holding for him. Stay nimble and wait for the inevitable.
Like most IPO's PSXP is overpriced ($23???).. Remember when PSX was spun off?.. a month later it was trading more than $4 cheaper than the IPO price. I will wait for a reasonable valuation as it appears too many speculators bought into the hype.. GL