The units tend to trade markedly lower after the ex. distribution date (more than the 55 cent distribution amount). They then come back. I think that we might get below $20 after ex date. I would trade that dip if it happens. NRP has a shrewd mangement team, if distribution is cut I think units will react in an overly negative way. With natural resource assets that NRP might want to own being so out of favor right now (think frac sand, gas wells, coal, etc) this might be a time when NRP wants to buy more both to diversify and to grow. I would think a distribution cut that frees up capital to buy cheap minerals could be a good thing in the long term. It is hard to imagine Mr. Robertson doesn't have a very long term- multi-generational strategy for this business. I think history will show that he buys low and sells high. My point is I would buy for the long term if there is a distribution cut that leads to a significant unit price decline ( 10% decline). Even with a distribution cut the yield will still be great and theoretically more stable.
To tp19490614: As I mentioned, unit price dropped significantly more than the 55 cent distribution and is now available for less than $20. I think this is because traders fear a distribution cut in the coming quarters. I would buy at these prices if you are a long term investor. By long term I am thinking 3-5 years. If you are trading I don't know what to tell you. A little good news for coal, especially for metallurgical could send NRP back to the $24-$26 range pretty quickly. OR as ascuew thinks, this thing could be back in the $17 range this fall. I am long term bullish though. If you can get in for less than $20 its a bargain. I think that management has the long term view because a huge amount of Mr. Robertson's family wealth is tied in with this company. He is going to have the discipline to make good long term decisions- including risking a distribution cut in exchange for purchasing diverse assets when he thinks they are undervalued. Obviously a distribution cut would hurt the unit price in the short term- but they knew that when they spent $300m buying the trona reserves. I like that they did it anyway. So long as I can get a decent cash flow out of this thing- with long term appreciation potential I don't care what the price is month to month. But I'm not trading it month to month.