Can somebody please explain this to me. I have owned BPT for years, but when I read articles like this that make my head ache, I just feel like getting out and on with something I can understand!
It's simple actually. BPT is a trust that distributes earnings from its entitlement from the fields. The variables to its earnings are simply oil price, the barrels of oil produced (up to its entitlement) and the costs.
The bears try to perform a discounted cash flow usually based on PV-10 which is an antiquated SEC requirement which discount projected cashflow at 10%. Now, you and only you have to make the call whether 10% is the right rate to use. Considering 10 years US Treasuries at 2% and junk bonds at c6-8%, I think 10% is high.
Bear in mind, BPT is a trust as such it will never put out press releases to defend itself. Also it is mostly a retail investor stock so it will have volatile days. Personally, I like such articles as it enables to accumulate more.
So, between 0.25% in checking and 10% yield, it's an easy answer.
There's nothing people hate to hear more than unpleasant truths. They would rather ignore it, even if it results in future losses to themselves. That may be because the human brain values short term much more than longer term. So a dividend payment in 3 months outweighs the risk of losing on your investment in 5 years. The brain wants that payment now and figures it can deal with the 5 year issue later.
It's still a solid investment regardless of whether SA's latest article is true. This is 2013. The world could end tomorrow. Who is worrying about years down the road? At this point, I'm not.
SA is a content site where differing authors giving differing opinions. For every BPT bashing article there are some that promote BPT. You don't have to take advice of differing viewpoints on your investments but to ignore them without trying to understand their points..... it just screams amateur.
seeking alpha has just about single handily knock this stock down. just as long as they keep paying those good dividends, i think you have nothing to lose. How they get their numbers, I will never know. Only roundrobinjack offers good analysis and simple explanations. read his posts!
what is it with Seeking Alpha?? I wonder what roundrobinjack thinks about its relentless knockdowns of BPT? Do other analysts agree? All I see is SA chipping away at it. And if the divvies are down somewhat, so what? They are still one of the best out there!