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Energy Transfer Partners, L.P. Message Board

  • bjfcpainc bjfcpainc Aug 9, 2013 11:09 AM Flag

    ETP's recent stock movement

    ETP's stock appreciation does not make sense and in the past these up moves have been followed by secondary offerings that smack it back down.

    As a result ETP's yield is very close to XTEX but with XTEX in spite of a "cautious" downgrade by Credit Suisse today is looking at double-digit distribution growth beginning in 2014.

    I would use this uplift in ETP to get out while you can move to another MLP like an XTEX for almost the same yield and certainly better long term distribution growth prospects. Don't be surprised if ETP doesn't drift back closer to $50 again.

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    • Couple of thoughts not that I am back in the USA. The problem is whether you are a long term investor or short term trader. I am a buy and hold guy and last fall with ETP at about $41 it was a buy. Today I am holding as it is going to be an uphill climb with interest rates and other investment classes looking possibly a bit better.
      As to other MLPs, there are certainly other MLPs offering opportunity and short term price drops offer shorter term trading opportunities. The E&P MLP arena has been beaten up and companies like LINE are certainly an opportunity for either big gains or a distaster. Since I do not understand that arena I invest eleswhere. Am sure there are others who understand E&Ps.

    • @bjfpainc - You can't be serious about XTEX can you? Take a look at their earnings year over year. This company is in the toilet.

      • 1 Reply to mcdusty61
      • You watch XTEX and you will find out how and why an MLP with a visionary management team turn itself around. I got the same type of posts on APL when it was below $10/share. You can look at the earnings and draw a conclusion. Why not read their presentation to see how XTEX is transforming itself via a large acquisition and a large organic bolt on growth program to those areas of acquisition.

        Looking at last year's earnings is looking backwards. The reasons for those lackluster earnings are related to these one-time up-front costs of acquisition and build out. Sometimes you have to get out of the mode of looking at financials and needing to look at what your management team is trying to accomplish for the long term. If more people had looked at how poorly ETP was being run in 2009 perhaps they could have avoided owning a dead money stock for four years; settling for high yield and ZERO, ZIP, NADA growth in return for a high yield. As I said many other reits doubled over the past four years AND offer you double-digit yield to your original cost as a bonus.

    • Goldman Sacks raised price target to $58.00

      Unless if there is a powerfull correction I don't think you will see a pullback to below $49.50. I would be a buyer below $50.00. I really like what ETP is doing...

      Sentiment: Buy

      • 1 Reply to runtravrun1
      • Unfortunately, ETP languished for five years; offering zero distribution growth and more importantly offering no growth whatsoever. While other MLPs like PAA, OKS, and MMP doubled and split their shares 2/1 ETP went nowhere. The three MLPs mentioned in the prior sentence plus many other MLPs including EPD, KMP, XTEX, GEL... I could go on and on with this list were out making acquisitions and building their geographic footprints.

        Yes ETP has self-corrected with one very large transaction the simple LONG TERM fact is ETP's future distribution growth will be more muted than the MLP peer group because it did the large transaction when their cost of capital was 300-400 basis points higher than peer group acquisitions over the past five years.

        ETP will never get a second chance to redo the last five years when they were not participants in acquisitions and organic growth projects because they tied themselves to retail propane and waited too long to finally jettison a truly terrible asset class.

        I was in ETP five years ago near today's stock price/sold/went into PAA and MMP which have more than doubled over the past five years but yield to cost in both are double-digits.

        Anyone in ETP should look for an exit and move into a faster growing MLP going forward. I would take a serious look at XTEX. Downgraded today, cautiously by Credit Suisse but recovered substantially by the end of the day because they have double-digit distribution growth in their future. The downgrade relates to a one quarter delay before management can start distribution increases. XTEX's current yield very close to ETP's so you get an equivalent starter yield with better distribution growth prospects going forward.

        Why? ETP management failed its shareholders and they can never get caught up in the most important area now which is distribution growth.

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