I have been following Inergy for over 2 years, have bought them along with Suburban Propane, and have made a ton. I have to admit that they made some smart moves. Now comes CMLP, who gobbled up Inergy. If the inseders have been buying on the new merger, can they be wrong? I think CMLP is a long term play and well worth buying today, considering a 7.5% divi. Anything wrong with that?
Many feel that they kinda shot themselves in the foot here lately. But, just like always, the market sends the stock down for awhile after one of these offers. The general market is showing a lot of life over the last week and CMLP will bounce back faster than usual as a result. 23 soon imo.
What CMLP is trying to do parallels what XTEX started to do late last year. A major transforming acquisition by XTEX changed everything in terms of their geographic footprint. They have missed on some deadlines but have a most aggressive $1B capex program going on so I can forgive those misses. Then, out of the blue, XTEX and Devon join forces and XTEX is instantly vaulted into a new best of breed MLP level along with WES whose sponsor Anadarko has been doing great dropdowns.
XTEX is now going to be investment grade after the Devon transaction.
CMLP wants investment grade status ASAP. My belief is CMLP will start to look for a similar dance partner.... not now but over the next year... CMLP has a lot to digest in the near term. I think the XTEX transaction will be seen as a new era type deal where upstream E&Ps spin their midstream assets they self-constructed into MLP joint ventures with the idea of eventually exiting the MLP but perhaps retaining their GP interest in the new organization.
I have taken a full position in CMLP placing my bet that a former division CEO of Enterprise Products wants to play in the bigger pit with the bigger dogs and that may be the path IF they can find a dance partner with gravitas.