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Global Partners LP Message Board

  • richardleeds richardleeds Aug 4, 2011 1:22 PM Flag

    Mgt. predicts loss for 3rd qtr, also

    distributable cash flow declines further in second quarter, continuing a trend that is now around 5 years, which is declining cash flow.

    So, loss for the quarter, declining margins, predicting another loss for third quarter--looks to me that there are better investment choices if you only want a dividend without opportunity for growth and improving balance sheet.

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    • I agree. I sold my GLP a few months back because I souldn't see how they were going to do well with the high energy prices.

      But things are changing, maybe. First, the price of oil has come down quite a bit recently. I have no idea how permanent this might be, but it should help GLP. The price of oil has dropped because people think the US will use less due to the continuing bad economy. But a lot of GLP's business involves heating oil for homes and businesses, and I would think that demand depends more on weather than the economy. Anyway, some time back, I tracked GLPs quarterly earnings to the price of oil and gasoline, and GLP's earnings have consistently tanked when prices spike. So maybe the reverse is true.

      Just as important, GLP has announced in its last 2 quarterly releases that it has not had any "opportunistic" buys of oil, and that has hurt results. Maybe with volatility (up and down) in the price of oil, GLP will get the chance for some good buys.

      Don't get me wrong - I still think GLP is a bit more risky that I would like. I had said previously that if the price dropped below $ 20, I might buy. Now I'm semi-sorry I didn't have the nerve to buy in the $ 17s a day or 2 ago. But I think we'll get another shot at those prices again.

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