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Suburban Propane Partners, L.P. Message Board

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  • stock_superstar stock_superstar Jan 29, 2008 3:05 PM Flag

    House of pain W/ Suburban Propane

    Competition for propane is increasing with the likes of Combined Energy Services (CES) and HECO which I believe is a new venture from Region Oil. IMO, Suburban just has to be losing customers. I have a funny feeling they'll use their cash to swallow up some of the smaller companies. That may be the only way they can increase their customer base. Maybe you buy now for a quick trade, but with the dollar falling, I wouldn't buy long term until late Summer.

    Good luck all!

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    • where is CES and Region Oil. I see an awful lot of fuel oil jobbers breaking into the propane business the only way they can.......buying in with low prices. I don't see this changing. there is nothing the MLP's can do except wait until these new guys have a critical mass and have to start making money. This is usually 3-4 years from start up.

      • 1 Reply to proxxxpain
      • I believe CES is out of Dingmans Falls, NJ or NY and HECO is out of Hackettstown, NJ. There may be others as well. As prices rise, customers become much more price sensitive. These new start-ups are taking advantage of the situation by offering extremely low entry levels prices. Even once they have to start making money, they may still be able to undercut Suburban because they're much more streamlined. To my knowedge, Suburban has exited the air conditioning service business. The result is customers are now going to HVAC companies for their A/C and heating service. What this does is minimize the value of Suburban's service departments and this no longer justifies the higher than average fuel prices being charged. Perhaps they will be exiting the heating service business as most other LP companies have done. I'd like to see them spin off their oil business before it dwindles further. BTW, I don't expect the CC to be very good.

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