Down almost 6% since I bought but Divvy made up part of the loss. Cannot fathom the trading patterns...looks like the price of the stock is being "managed" by someone. Called IR and they are just as baffled. Low volume appears to allow abuse of trading patterns. Will begin to sell my positons if something does not happen soon. This appears to be one of my clunkers now. Have to bite the bullet.
Disenchanted? Makes sense. I don't know if PNG is undervalued or if it is just going to remain a dog that was initially overvalued.
Manipulated? How do you come up with that? Yes it is low volume... 53000 shares per day average of late. It's a free market. Put your bids in. There just is not a big market. So spreads are naturally wider. If you can take a look at the level 2 quotes, you will see there is not a lot of depth in the bids. So if somebody were to enter a market order to buy or sell 500 units, you would see some price spiking up or down. There are a limited number of buyers near the last transaction amount. There are a limited number of sellers with orders entered near the last transaction amount. If you think it is under-valued, buy more. You are buying a stream of distributions. Lower prices would make it a better buy.
If you trade, always use limit orders.
So how does this manage to go down in a market where it seems that everything else in an energy business goes up? Dunno. If viewed as a sequence of distributions, the value of the distributions goes down as the yield on bonds (another stream of cash) goes up.
I hope it is contra-cyclical (negative beta). That would mean it would tend to go up as other things fade. We can hope.... or sell (with a limit order). I will hold for now. Distributions have been rising. PNG has been expanding capacity. So it may work out well.
I agree with the comments about MLPs being generally great long term investments. However - I have been aggressively trading MLPs since 1993, in an effort to exploit "unexplained" spikes up and down.
Here's what I have found: virtually every thinly traded MLP I've traded (at least 50 or so) has frequent periods of unusual weakness and frequent periods of "unexplainable" strength.
I sold PNG the first week of January at 25.25 or so, and started buying back at around 24 a couple of weeks ago. I've bought pretty aggressively over the past couple of days, and will "back up the truck" if the price goes much below 23.
I'm betting that we'll see 24.50 or higher by late April. Could get lucky and see 25.50 or so.
Keep this thought in mind: a typical stock broker with a position in a stock will generally hold 50,000 to 150,000 shares of a 25 dollar stock for his/her clients. If only ONE broker decides to liquidate, the price can easily fall $1.00 or so for several days and stay down til he/she has finished selling. Same thing is true in reverse.
NEVER sell when you see this type of action. Sell when the price spikes for no apparent reason, then buy back next time you see weakness like this.
"This appears to be one of my clunkers now. Have to bite the bullet."
If you're buying this for large rapid capital gains, you're in the wrong type of stock.
MLP'S are for tax deferred increasing income, with capital gains coming over a long period of time like 5-10 years. There are occasional exceptions to this when one that has fallen on hard time like APL gets back on track but they are uncommon.
I've got a boatload of MLP's & some have more than doubled in price, but over 10-12 years. My yield on my buying price ranges from 10-20% in these cases.
Anal.lyst, I agree 100%. "MLP'S are for tax deferred increasing income, with capital gains coming over a long period of time like 5-10 years."
The following Barclays quote is from Investor's Village: "Barclays maintains an 'Overweight' on PAA Natural Gas Storage, L.P. (NYSE: PNG), PT $27. Barclays analyst says, "PNG is relatively well positioned to navigate challenging storage market conditions. Despite industry-wide gas storage challenges (narrower spreads, lower volatility), we believe PNG can deliver mid-single-digit distribution growth due to visible, low-cost organic expansion, a low cost of capital and high percentage of capacity under multi-year firm storage contracts. The Southern Pines (SP) acquisition adds to PNG's cash flow stability, with average contract duration exceeding five years." "2011 EBITDA guidance increases to $101-111MM vs. previous $66-$74MM, due to SP acquisition. Our 2011 EBITDA estimate of $109MM is double 2010 level. YoY growth is due to contributions from SP and capacity expansions at PP caverns 3 and 4. PNG's average storage capacity in 2011/4Q11 should increase 50% YoY to 71/75 Bcf, respectively. However, units outstanding will increase 50% YoY from SP acquisition."
MLPs are for the long-term and for those who have patience. This company has good management.