Volume hasn't been unusually large and the intra-day drops aren't on outrageously large sells, but it looks like the increased liquidity due to Yorktown isn't helping XTXI gain any traction. Given XTXI's projected dividend growth, I think XTXI is fastly becoming a very good buy. Management forcasted a $3.60 dividend by 3Q07, which probably puts us on track for a $3.00 dividend by year end. I am assuming we essentially will see a .05/Q increase in the dividend for the next 7 Q's, which would put us just over a $3.60 dividend in the 3 Q of 2007.
If you look at the closing prices, this is below the previous inflection point. And there is the probability of going below that. Not a bad thing at all if you still have some shares to fill your target count :-)
But, I think there was also an issue with a pipeline that they needed to fill after a customer was getting bought. Earnings are never as smooth as Wall street wants to have them and we should not be biting into the game of expectations. We buy assets and we buy management, not future promises. We should be evaluating promises with our eyes open. Perhaps the seller knows more than we do.
Indeed it is a good time to buy if you think the company is fundamentally sound.
I'm not sure what pipeline you are refering to.
I think the increased Yorktown liquidity has really contributed to the problem. While volume hasn't been much higher, the overhand of 700K shares in the hands of investors, many of which will choose to sell some or all, puts a lot of selling pressure on XTXI.
The Barnett Pipeline should show up in the 2Q results, and really show on the 3Q.
One thing that is new is that, I listened to the IPAA conference call, and Barry Davis mentioned that aside from adding compression to the North Texas Pipeline, they may look at looping. This is good news, in that the additional compression does not provide enough capacity.
Are you refering to the Kinder Morgan portion of the Carthage line geoequities?
Yes, we are buying the current company, not the company in 12 months from now.
I continue to believe that these guys are out to build XTXI into a much bigger company. They keep adding talented folks and assets.
They have, I think, in the treating division, a really good business going for them. They are the largest treater by far. They have pretty good payback rates (4x). I think that this segment should get better coverage from the market.