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Cheniere Energy Partners LP. Message Board

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  • reit_freak reit_freak Sep 24, 2012 6:08 PM Flag

    Buying Opportunity?

    I think you've hit the nail on the head with your question. While I do not regularly trade CQP, I will definitely be playing the SPO/dividend cycle here over the next month or so. I was alerted to the opportunity by a contributor over on the AGNC message board, where a group of regular traders constantly (and fairly expertly) discuss the post-SPO rally and subsequent dividend run-up in that stock (and a select few additional mREITS) virtually every quarter. In my estimation, there are few set-ups better than the stock price pullback triggered by a SPO announcement in a quality, high-dividend stock - followed by a dividend run-up in that stock. Given the research I've done in the past severaI days, I am aware that there are those who will question the "quality" part of that description when it comes to CQP, but I would anticipate a solid positive move in this stock between now and the anticipated (but not yet declared) ex-dividend date in late October. I am particularly encouraged by the fact that in the 3 trading days since CQP's 8 million-share SPO announcement, over 7.8 million shares have traded - in a stock that had traded an average of only about 113,00 shares a day prior to the SPO. So, one may conclude that the bulk of the SPO shares have been sold, and that the biggest part of the SPO price pullback has already occurred. This is not to say the the share price can't meander and even weaken a bit more before bottoming, as evidenced by the research on CQP's last SPO shared over on the AGNC message board (look for the thread "CQP: the next 2 weeks post-offering"). Most of us who trade AGNC like this every quarter use the leverage of long Call Options to maximize our returns in the dividend runs. I know that we have been waiting for the November options to come out for CQP before getting involved. Those options are now open for trading, and I know of at least a couple of the AGNC regulars who have already started legging in to CQP November calls, BUT please note that there is not necessarily any reason to rush into these Calls. One more note - if' you're looking for additional opportunities for these kinds of plays in the next month or so, keep an eye on the AGNC board, where we're all getting ready to put some of AGNC profits to work in several energy MLPs. Hope this all helps, and best of luck to you.

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    • here's an snippet on how fast an LNG export facility can pay for itself (and sabine pass may be the only location to receive approval for awhile)

      "But the industry is capital-intensive and costs are considerable: A “typical” investment includes an outlay of over a billion dollars for liquefaction, ships at over two hundred million per vessel, and a receiving terminal at half a billion to a billion dollars. Yet even with those costs, the economic incentive is there. Currently, the North America pays just over $3 per MMBtu while the Japanese spot market price hovers around $13 per MMBtu."

      Long-term contract shipments to Japan would likely be priced at less than $10 per MMBtu, according to Reuters. That’s a deep delta. Investments in supplying LNG to hungry Asian markets may yield payback periods of under five years for the first players into the game, according to recent reports by Wood MacKenzie, a global energy consulting firm based in Annapolis, Maryland.

      When CQP/LNG is up and running, the payback will be very fast = lots of profit. (All of this hinges upon Obama's interference)

    • Freak, Thank you for the "high quality" reply. I'll peruse the AGNC per your suggestion.

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