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Enterprise Products Partners L.P. Message Board

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  • arbtrdr arbtrdr Nov 9, 2012 4:12 PM Flag

    something is up

    The reason is really simple - reallocation. It is just about done. Several of the major brokers could not sell ETP and a couple others because there were sell recs on them. In the last 3 days those sells turned into hold/quasi buy recs. Thus managed money by the bucketful is moving into ETP and others beaten down and now having better looking prospects. There is also some rotation by that some money out of MLPs. Those $$ ebb and flow.

    jim - Am wondering what you are calling a "slippery slope? The market is down. If you compare EPD to the DJI the Dow is almost exactly even in last 6 months. EPD is up 2% and has paid about 4% in distributions. EPD is only down 6% from its all time high. Not exactly sure about a pipeline paying for itself in 3.5 years. According to KMP it takes 18-30 months to get permits and construction done and then 18 more omnths to fill it. EPD has a coverage ratio and retained cash that are #1 in the industry. The distribution is secure and will grow by about 6% a year going forward. You cannot have owned EPD very long as it has only been above the current price for a couple of months. Suggest you relax.

    There is absolutely nothing happening with EPD. If you doubt that call them. EPD is still my largest holding. Love the reinvestment price with the discount.

    ARB

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    • Wait until January when the light goes on for folks that this is not taxed at the dividend rate as far as the distribution is concerned. Money is going to come flooding in as rates are not going anywhere and 5% is 5% especially with the increase in rate. Already overweight, but I'm a buyer at 50.

      Well I bought at 50 and lower it went....oh well, I'm sure it's tax concerns for a big holder. Considering gains are taxed as ordinary income, if those rates are much higher for high net worth individuals makes sense to book some gains...I guess.

      Interesting because report today that the U.S. will be producing more oil than Saudi Arabia by 2020, do you think that pipelines might benefit from that? Short term pain for long term gain IMO.

      Sentiment: Buy

    • Each time tax reform comes up in DC, chatter starts about MLPs getting their tax advantages whacked. But it hasn't happened previously, and each time the MLPs have bounced up again after the chatter subsides.

    • Nice post, ARB. Some sound facts and perspective helps everyone sleep better at night.

      Sentiment: Buy

    • weewillie08@sbcglobal.net weewillie08 Nov 12, 2012 10:59 AM Flag

      Arb, there may not be anything happening with EPD as you put it. But if you bought the stock last month for $55 and its trading today for $50, then that puts a whole new light on the situation. It'll take a whole lot of dividends to make up for a hit like that. That is a significant drop in shareprice and I see nothing even at this point that would tempt me to buy the stock. Just have to wait and see where all of this stops. When I see this level off and then show some volume on the up side, I'll considering buying shares. But not the way it is right now. Good luck investing.

      • 2 Replies to weewillie08
      • weewillie- I would not be buying today. I would be waiting for the panic selling to stop. If I bought a month or two ago I would be holding. If I were a trader (I am not am think using MLPs to trade is crazy) I would have already sold.

        The real question is - is there ANY change whatsoever that suggests things are different with EPD going forward? Why are you talking about EPD when companies like INTC hits a 52 week low today. The market in general is down about 1000 points on the DOW in a couple weeks. It is not EPD - its share/unit price will come back over time - it is tax selling, fear over what Congress will do or not do, and tax selling to book profits.

        ARB

      • buy low and sell high. if you bought at $55 you bought high (look at the chart). the stock had been on fire and corrections in stocks happen (they don't just go up every day). as stock drops the yield increases so if you double down you get a higher yield and buy the exact same company (that you liked at $55) 10% cheaper.

    • Hey ARB thanks for the reply. I havn't owned it this time for very long. I've done better with PAA. What I can remember about the pay back is when they are up and running. I apperciate and respect your knowledge in this area as I'm somewhat new to investing and stick close to oil. I've managed to increase my saving by 200% in 3.7yrs. as I started in 09 when every thing was down. I've made some mistakes and left some on the table but I feel now that I don't want to gamble as much as I did in the past. I guess I got a little frustrated today. Jim

      • 1 Reply to jimcarrera47
      • Take a deep breath. I strated with these guys in 1995. I have put some additional $$ in and reinvested distributions. Now have a my largest single position.

        Nothing has fundamentally changed. What did change was peope looking to take gains today by selling stocks that are up. Notice the ETP is up - no gains to book by selling - while all the high flyers in the MLP arena are down big time. Some like SXL down like 4% today. If it was fundamentals other that tax reasons wouldn't ETP (which owns the GP and about 30%+ of SXL) be down as well. This is tax selling.

        As a poster on the IV board said MLPs are not for the weak of hand. We have gone through this before.

        ARB

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