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Inergy, L.P. Message Board

  • bosox_pats bosox_pats Feb 8, 2012 7:52 PM Flag

    Getting Interesting but early

    Looks like distribution will be reset to a DCF coverage level of 1.2 - 1.4X. At 1.2X, the annual distribution goes to $1.60. At 1.4X, distribution gets reset to $1.36 annually. Assuming units trade to an 8% yield, the range seems to be $17 - $20, so market seems to have reset to the right level. As fundamentals improve, upside looks to be $22 - 26 to trade to a 6% yield. Unfortunately, one will probably have to wait a year and hope the weather turns cold. Perversely, lower oil prices could actually be a help.....