- though not in particular related to DMLP. rather a broad "sell natgas trusts" asap recommendation in the light of sustained nat gas price weekness. which in a way makes sense - and in another way not. the former is trivial. however, nat gas prices may recover sooner than many think. imho it is nothing but pure guesswork at this point when nat gas prices will bottom out and start climbing. So by selling dmlp here one might get a chance to buy it 20 % lower - or perhaps one will have to pay 20% more to re-enter. It#s a hold for me at this point, even if i account for a probably inevtiable dividend cut somewhen down the road.
I echo your thoughts. We know gas is going to stay down for a while as it is oversupplied, but rig count is dropping steadily and will likely continue to drop. Gas might begin to recover early next year. I don't see a huge recovery, but perhaps $3-$3.50/mcf.
Hard to call a bottom, but I am following many of the trusts. One thing that is nice about the monthly trusts is we get to see the distribution 2 months sooner. I am expecting a lot of carnage in the trust sector, especially the dry gas ones.
That being said, if/when the carnage happens, that will be the time to buy. Gas prices aren't likely to go much below $2 for an extended time period. Sure, it might drop below $1, but investment will drop and supply will drop and price will eventually recover.
I am not sure if I would sell if I already owned it, but I know that I am waiting to buy because I expect a lot of sellers when those monthly distributions (or quarterly in DMLP's case) come in a lot lower than expected.
I'm looking to buy at a 7.5%-8.5% yield on $2 natural gas. That will give a real nice tailwind when gas recovers.
Hi, Bag. Thanks for the post. I believe the 2012 Q1 dividend is to be paid on 03 May to common unitholders as recorded on 23 April. That would be next Monday. Seems strange there would be a sell off prior.
Have I got something wrong or missed something here?