I guess we look at it a bit differently becuase I saved 25% of both my wife's and own earnings for 25 years and invested starting in 1992 into MLPs. I am more than happy with a 8% return and happier still with the 12% I have averaged since 1998. Thus understand the concept of controlling with less outlay but today find it hard to keep up with investing my distributions and dividends. Do not have a sense of where prices are going for the next 12 months. EPD and MWE I agree will be higher 24-36 months out. Will check out buying a call or selling a put on those.
Guess the good news for APL is it was a CVX drill rig that hit the line. Hard to imagine how that would be possible for CVX to hit their own NGL line with their own drilling rig. Think I know weho is going to apy for this one. The good news is it show be back in service very quiclky as only a few 100' damaged.
What is always interesting to me is the difference between KMP and KMR. The spread hit $7 on friday. KMR is about 10th down on my list of ownership. Have it in my Roth IRA.
Have never used any options. Probably should, but trading MLPs does not work well for a long term holder like me.
What is important for investors is to actually READ some of the analysis. The reasons for the price target is ofen very meaningful. The targets themselves are much less meaningful. Last - Marketwatch, Dow Jones and IBD - None of the three have any clue aboyut MLPs. They use a computer for their analysis. IBD does a good job with that analysis, but any "analyiost" that talks about EPS or P/E in the same sentence as a MLP needs to be ignored.
Why? Is there any news likely to come out from BPL? Are we likely to get more help like last week from Fed talk that moved BPL from 65 to 67? Think as you post you will be "staring" for a while until we get next quarters earnings/distribution numbers before any significant movement. Would love to hear any reasons from you for a move up.
I agree it is a matter of timing, but BDCL is a bond, but it is completely unsecured and guaranteed only by a promise by UBS - nothing else. In any sort of credit crisis or large selling off of the ETN it is illiquid. You mentioned the downsides and upsiodes, but I will happily take my tax sheltered 13% on EPD with a kicker from the DRIP discount and sleep at night instead of ordinary income taxable to me at almost 40%.
Any hint of major tax reform that hurts business and a leveraged index gets slammed. I note that I do own small positions in 2 BDCs. Would rather pick and choose.
I got caught up in 2008/9 with some preferreds that did not pay anything and I could not get my money for over 1 year. No thank you. EPD continued to pay me more and the reinvesting of distributions then at a 20% yield was fantastic.
They absolutely need bulk, but after they get to about 2018 or so in the Marcellus, producers are going to be driling to maintain productio so no need for more facititles in that area. Just need to wait for the next gold rush. The good part of shale is there are lots of locations and the old camps will not just fold up and go away. Drilling will continue with total production mostly flat for a while.
As to overseas MLPs - imtersting thought. The only problem there is political risk. One minute you own an asset and the next you do not in South America. Just spend some months there and that issue is worse now instead of better. Also could we not tax the foreign MLPs differently or would the foreign taxes they pay offset any potential US taxes?
The conglomerate structure of KMP is interesting but it was built on long haul pipelines as a foundation and KM has a philosophy of increasing the distribution whether or not there is the $$ in the till and of growing through acquisition. Thsat has resultied in some expensive growth - sort of like MWE buying out EMG. Organic growth is about 40-50% less in cost and you end up with a product that at the time of completion is 100% useful. A number of the KM assets are either underutilized, abandoned, oer like EEPs pipes in need of large capex to keep them up. FWIW - I do own KMR but at a level about 1/4 of EPD and MEW.
KMP 3 years ago was indeed trying to force its way into the market. The problem is MWE has successfully and continuopusly worked to develop markets for the NGLs of its producer customers. MWE has in fact done so and tried to stay out of the pipeline business only building shrot distances of pipes needed to connect.
Today MWE controls a huge volume of NGLs. They have also said that ATEX, Mariner (E&W) and one other pipe will be needed for takeaway from the Marcellus/Utica. EPD is quite happy whoever buids the pipeline as long as it ends up at their fractionators. Williams has their own collection and distribution business as does Dominion and there is plenty of product to keep all happy for at least the next 10 years or more.
Where I disagree is that MWE is in the Big League of MLPs. Not yet. In the Marcellus - absolutely but it is about 1/6 the size of KMP and EPD. MWE is still experiencing growing pains and as such continues to do JVs instead of doing it alone. Since their focus is not long haul pipes I understand the KMP JV, but MWE is still struggling with almost as many processing plants going on line in 2014 and they built in the entire rest of their existance. This growth has taken its short term toll on DCF both from costs that are expensed and the cost of a non-accretive asset from EMG (I get it that those assets will pay off big time in 2014 and beyond). MWE has bought its way into being the market maker and mover in the Marcellus. And yes, I do agree that 5 or 6 years dwon the road that MWE might well join the really big guys.
The real question is do they or we want them to?
Why the fixation on daily or very short term moves? The acquisition means more DCF but not for a while and the acquisition is LOD news.
Take a look around, lots of thnigs effect not only CMLP but the other MLPs as well. The Yellen testimony offest fears of rising interest rates this week and almost all MLPs moved upward. Also discussion about NGL pipelines and LNG exports along with Warren buying CVX. I watchthe onger term situation barring any company specific news that was NOT already announced.
Wonder if there will be any falout on monday. While CVX was the operator, APL owns 20%. Have never heard any news as to who was running the drilling rig that cut the pipe. Am sure that the attorneys will win on all sides.
Couple of things. If you sell all your units tomorrow those within the last 6 months will get classified as STCG. Sorry.
What you legally received was a stock dividend. Your total cost basis is the same as before. It simply reduces the basis per unit.
Most brokers will initially list the units received and then later on give a detail explaining whatever they call it. The effect is the same.
Trust me - the new units did not appear out of nowhere!
FYI - There are $175B in projects currently under construction in Australia. Canada has permits that would result in about $20B if all projects are built. What is happening in australia will dwarf the other projects and thery are closer to Asian markets for faster ship turnaround.
This would be good news except it is not true. The supply of LNG is ramping up big time. Australia is going to pass Qatar in a couple years and the USA is coming on line as well. The headline simply gets part of the story. As to APL, the price of NG really does not matter to them, in fact high NG prices mean lower profits on KW contracts. What they need is high NGL prices. Neither is likely to hapen in the US for at least several years. Supply is growing too fast and we cannot be infrastucture built to export fast enough.
Why are we now up and how high do we go? Thoughts are simple. EPB moved down with the rest of the MLP due to the normal ex div selloff and concerns about interest rates. Looking at anything other than a long term trend absent any company news is useless IMO.
You have given us no information so how should we know. About 100 things you ned to consider including need to ever sell, recapture of depreciation on that sale, the amount of MWE you already own, are you really planning on holding forever? etc. etc. etc.
Is your question serious? Have you missed the news about TVA shutting down several more coal plants? People have the idea that coal as a fuel is going away. and thus the coal companies too.
MLPs tend to trade down about 2% when they do ex-div and before the div is paid. This week you also have lots of brokers trying to get people to sell MLPs to free up cash for a new multibillion $$ MLP fund. The yield will support RGP now a bit over 24. The lawsuit means nothing. RGP just moved until today in a dwonward pattern. No news is good news right now.
Marv - Edwards wrote that before the ccall. He is stupid in regards to MWE. The DCF numbers he put out will not have even a 1.0X coverage because the units outstanding are wrong. MWE must issue a higher % of units/debt this year and at a probably lower price. Edwards has no units being issued in Q4 and not enough to raise another $1B+ next year in equity. Last, we all need a clarification as to whether MWE is still having the receiving of Investment Grade as a PRIMARY objective. This is important in the longer term - not short term. If they are moving this goal back then MWE could increase by more than .01, otherwise the math does not work. Using MWE numbers they will not cover even a .01 increase next quarter with the 10.4M units issued in Q3 and more via the ATM offering next year.
No - Shell expenditures for new projects are many billions a year. Interestingly enough they have had a lot of partnerships in the last few years with local operations people.
i ask does it make any difference? If the NGLs can be taken elsewhere via pipelines to Texas, the east coast, canada etc thne do we really care. Ditto for NG. The only difference is the US does not get the benefit of the jobs the plant creates. Am I missing something.
Dreiser - Couple of thoughts - MWE only processes a tiny fraction of the total USA NG output. Australia is setting up LNG exports that come close to the entire USA output. Do a search on Pluto project and Australia or look at RDS and thier projects there. Coal is going to continue as China does not give a ri[p about pollution. LNG too expensive compared to coal for now.