Do not know BPT--at all!
here is some news I found--please share with us all why you think this is a buy --do you own some?
Cut: This may be a GOOD buy --dunno I see mixed comments
NEW YORK (TheStreet) -- BP Prudhoe Bay Royalty (NYSE:BPT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
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Highlights from the ratings report include:
BPT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.72, which clearly demonstrates the ability to cover short-term cash needs.
The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, BP PRUDHOE BAY ROYALTY TRUST's return on equity significantly exceeds that of both the industry average and the S&P 500.
The gross profit margin for BP PRUDHOE BAY ROYALTY TRUST is currently very high, coming in at 100.00%. BPT has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, BPT's net profit margin of 99.51% significantly outperformed against the industry.
BPT, with its decline in revenue, slightly underperformed the industry average of 1.7%. Since the same quarter one year prior, revenues slightly dropped by 7.1
BPT is one of the older royalty trusts (there were a few of these other older trusts, like Sabine, Hugoton and San Juan Basis) that were set up years ago before fracking became widespread.
I immediately don't pay any attention to any financial investment report that tries to use standard metrics, like debt to equity and p/e ratios to analyze these types of instruments. First off, BPT is a trust and can't have debt. Second, it's not an operating company like a GE or IBM, yet these publications try to show their worth by analyzing them like they are the same. Reminds me of publications that try to analyze MLPs and mREITs by looking at p/e's and payout levels.
Since the distribution has been declared, the best way to analyze these types of stocks is to look at the chart to see if in fact a dividend run occurs. If you were interested in it as a longer term play, you could look at its history to see how much oil it produces during the particular period (it can vary according to the season and maintenance) and see how the price of oil was during that period. Although the pros know approximately what the distribution will be based on a study of this info, these investments tend to be more illiquid and retail yield chasers can push them up in price. The yields fluctuate, but when retail see Yahoo print the yield at 12% or whatever, they think that is the yield forever and they chase. Some have held these for years and have done ok on a yield basis (the royatly income is taxed at regular rates in a taxable account but you get a depletion deduction), but like anything, it depends on what your cost basis is.
Max, not a long term hold. Just looking for the move up that happens regularly there. 'X' date coming soon followed by the pay day five days after that. I'm thinking we get the div. announcement on the 5th. Followed by the 'X' date on the 10th, followed by the money going into my account on the 15th. Stock looks to be able to hold its price in here so I'm not so worried about a drop in price. GL Jim PS, if nothing else, by next Monday we see a move up of say 2.50 you just take the money off the table and go down the road.