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Sunoco Logistics Partners L.P. Message Board

  • stok1mom stok1mom Jan 3, 2013 1:45 PM Flag

    Time to take some profits????

    We are at $52.88 - 52 week high. Time to sell? Take some profits? Can this keep going higher? Up on low volume, a bit tenuous....

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    • Whether to sell would depend on your tax situation (in an IRA, or if in a regular account how much deferred taxes you'd have to pay).
      As to whether it can keep going higher, the yield is now under 4%. That's the very low end that MLP yields tend to touch. So it would likely only go higher based on distribution increases. But how much of a higher distribution can ETP squeeze out of this without making the coverage ratio too low? So what you need to look at is the DCF expectations and figure how much ETP might be able to raise SXL;s distribution, then consider that percentage as the top end of price appreciation you are likely to see. And that is assuming everything goes perfect. Any disappointments and this could fall quite hard. It's priced for perfection.
      In conclusion, whether to sell is impossible to recommend without knowing your tax situation. But I wouldn't be a buyer at this price.

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