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Eagle Rock Energy Partners, L.P Message Board

  • ruby.thedyke ruby.thedyke Jul 25, 2013 11:33 AM Flag

    This recovery may be an opportunity . . . to swap out.

    If you bought EROC trading positions during this LINE nonsense, at $7.80+ you probably have a tidy little profit. But, there's a distribution coming soon and this is still way below it's "normal" trading range. But if the Q2 semi-announcement of cash flow below par has you concerned, it may be wise to consider selling out here . . . and buying LINE.

    Why? Let's say this recovers to $9 in the medium term. At say, $7.75, that's a $1.25 additional profit. Let's kick in the 22 cents even, now we're to $1.47, a 19% profit. Let's give it the benefit of the doubt and say 20%. Where would LINE be 20% higher than $27 say? $32.40, still several dollars below it's normal trading range, and with a monthly distribution to pay you to wait for the full recovery. If it got back to $38, that would be an additional 20%, double the profit you could make here under my assumptions, very reasonable imho. Just saying.

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    • And . . . I just did, not only my trading position, but what was left of my long-term hold as well. I just can't justify holding this above $8, when the DCF per unit is pricing it below $7 in my mind. Management can talk all they want about the sunny days coming, I don't recall them predicting the last two quarters. This recovery to over $8 while LINE is languishing at $27 is a gift, a chance to change positions without losing a penny of income, for a company with a much better chance to cover distributions and at a bargain price. I just can't pass that up.

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