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Apple Inc. Message Board

bbandassoc 1063 posts  |  Last Activity: Feb 5, 2015 8:26 AM Member since: May 31, 2011
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  • Reply to

    lnco not going anywhere and will pay divivend

    by roadtoad255 Dec 10, 2014 12:01 PM
    bbandassoc bbandassoc Dec 10, 2014 5:34 PM Flag

    Let's face it, unlike LINE, you can sell LNCO without the ordinary income issue associated with the LINE distributions. I sold my LNCO for this very reason and held my LINE. In time, both will rise, but LNCO will perhaps do some catching up after tax time ends. I am looking to get back into LNCO, but haven't yet.

  • bbandassoc bbandassoc Dec 10, 2014 4:44 PM Flag

    The bottom is likely not reached until the Iranians agree to a nuclear arms deal and the Russians get out of the Ukraine. Until then, America and the Saudi are going to make certain oil prices fall and the media is going to feed the frenzy of fear.

  • Reply to

    oil 50 means this goes bankrupt...hahaahha

    by wassayassa Dec 10, 2014 3:28 PM
    bbandassoc bbandassoc Dec 10, 2014 4:41 PM Flag

    Could you perhaps offer a little "math" to support your claim? Otherwise, dangling on it's own, your statement is a little hollow (i.e. sounds like the musing of a fool).

  • Reply to

    $2 may be generous.

    by kenberthiaume123 Dec 10, 2014 4:22 PM
    bbandassoc bbandassoc Dec 10, 2014 4:36 PM Flag

    Fortunately, it does seem their dividend is safer than BHP or RIO, so the yield will be spectacular. Frankly, I hope it goes to $2 so I can get back in with he shares I lost money on when I sold at $10. It would be a just reward.

  • Reply to

    Analyst Updates

    by bbandassoc Dec 10, 2014 8:14 AM
    bbandassoc bbandassoc Dec 10, 2014 9:05 AM Flag

    One last thought on this. Is it also coincidental that the next OPEC meeting and the new deadline for Iran nuclear talks are both June 2015. The Saudis don't want a nuclear Iran any more than we do. Perhaps the end game is to push Iran's back against the wall with lower oil, and then, Saudi will agree to oil cuts in June, if Iran signs a deal. Okay, enough for conspiracy theory for one day.

  • Reply to

    Analyst Updates

    by bbandassoc Dec 10, 2014 8:14 AM
    bbandassoc bbandassoc Dec 10, 2014 8:51 AM Flag

    I am not generally a conspiracy theorist, however, I find it somewhat more than coincidental that the Saudi's (America's ally) is leading a charge to lower oil that just happens to hurt Russia, Iran and Venezuela more than anyone else at a time when the west wants concessions out of Russia and Iran. It may just be that this is all politics and we will get a resolution to the oil price when Russia and Iran submit to terms of the liking to the west.

  • bbandassoc bbandassoc Dec 10, 2014 8:30 AM Flag

    In the latest report, oil inventories in developed countries is 15 million barrels higher than the 5-year average and down 5.1 million in November. In addition, OPEC pumped about 600,000 barrels less per day in November bringing their total to about their 30 million target. In a rational world, it would seem to me that 15 million and declining with OPEC production moving lower would all be good for oil prices, but still the only word we hear is "glut" and how it's going to get worse. Yet, we also hear majors cutting capital spending and I know some shale producers are already cutting back because I know people in the industry who have been laid off.

  • bbandassoc by bbandassoc Dec 10, 2014 8:14 AM Flag

    We have had several analysts lower their price targets on LINE to the $22 to $28 range and one remain at $33. It's encouraging to me that given these guys would usually be talking with management and better understand the situation that they continue to be comfortable enough to maintain buy ratings and PTs more than 50% higher than the current price.

  • Reply to

    What management should do now....

    by seanintlmom Dec 9, 2014 8:20 PM
    bbandassoc bbandassoc Dec 10, 2014 7:22 AM Flag

    With everyone forecasting the worst for oil prices is yet to come (in Q215), it's unlikely any of these stocks will move materially higher unless there is an event in the interim. If they cut the dividend, you will likely see an immediate 20%+ drop in stock price though, consistent with others who have cut. With or without the dividend, this stock could go to the $22 to $25 level when all the announcements about the majors cutting budgets start hitting the headlines, not that everyone doesn't already know it's coming. It will get there quicker with a dividend cut. Still, I have started accumulating a position at $29 because I want to be an owner when the oil prices turn. This should be a $50+ stock again in a couple of years, if not sooner, as this cycle plays out.

  • PT raised to $50 to $54 from $38 to $42.

  • Reply to

    Share price

    by foofbear Dec 8, 2014 4:15 PM
    bbandassoc bbandassoc Dec 9, 2014 7:11 AM Flag

    Read an article indicating VALE is the best positioned of the majors to cover its 2015 dividend without significant borrowing. And, with asset sales, they should be able to cover it without issue, if that's how they choose to use the proceeds. Who knows how long it will take, but VALE seems very well positioned overall to benefit when sufficient supply is driven from the market and demand increases over time.

  • Reply to

    Any guesses on when the Div drops.

    by giday30 Dec 8, 2014 7:00 PM
    bbandassoc bbandassoc Dec 8, 2014 8:57 PM Flag

    IMO, it will only drop in 2015 if oil prices fall substantively below $60 and stay there for more than a quarter or two. At higher prices, LINE can weather the storm with their hedges and cost cutting, but there is a limit. Personally, I am glad to see oil prices tank now because I believe it will force reactions that will cause it to go back up and stabilize sooner rather than later.

  • Reply to

    ESV Dividend History?

    by bijom Dec 8, 2014 4:01 PM
    bbandassoc bbandassoc Dec 8, 2014 8:40 PM Flag

    I just bought my first shares today at $29. My understanding is that they have never cut the dividend and that they have recently raised capital as well as increased their revolving account and will use these, if necessary, to support the dividend. Not that things can't get tough enough for long enough to require a cut, but it is unlikely unless things go on for more than a year or so.

  • Reply to

    I wish oil would hurry and find its bottom

    by cajunlady123 Dec 8, 2014 10:24 AM
    bbandassoc bbandassoc Dec 8, 2014 5:24 PM Flag

    I agree. The faster it gets to wherever it is going, the sooner the Saudis or others will have to act and the price will recover. For the most part though, LINE should weather the storm pretty well for the next two years with their hedging, but they probably need oil above $80 or $85 entering 2017 to support the current distribution. Unless we have a global recession, I would expect getting back up above $80 over the next 2 years is most likely to occur given it seems no one is motivated to have prices sub-$80 for long. Certainly, prices in the $60 area for an extended period is going to cause chaos in certain countries dependent on much higher prices to fund their social safety nets.

  • Reply to

    Huge Hedge Profit

    by madcoweater1 Dec 8, 2014 12:48 PM
    bbandassoc bbandassoc Dec 8, 2014 5:20 PM Flag

    As I understand, their bond covenants permit them to use $500 million to buy back units and the board approved a $250 million buy back this past spring. I would assume they will wait and see just how bad things get before they pull the trigger on any buy back though.

  • bbandassoc bbandassoc Dec 3, 2014 2:49 PM Flag

    The Street uses a cookie cutter analysis that is inappropriate for some businesses. Still, one can paint a pretty ugly picture with LINE/LNCO right now, if they see the cup as half empty. Yet, I can't reconcile how cash available for distribution in Q3 was a bit over 1X, even without the transaction related benefits and suddenly it's going to be more than $50M negative after accounting for the transaction costs in Q4. It would seem to me that all of the Q4 shortfall must be one-time transition costs since hedges (prices) will not change and volumes are actually higher. If so, the nut LINE/LNCO must crack in 2015 at $70 oil is only to find about $150M which would seem very doable. At $60 oil, it's only about $225M. So, personally I think the distribution is safe for the next two years and the only worry is that oil prices stay substantively sub-$80 into 2017 when hedges are gone which I personally think is highly unlikely, but who knows.

  • bbandassoc by bbandassoc Dec 1, 2014 5:45 PM Flag

    The December dividend was not in doubt. The board approves dividends quarterly to be paid in equal monthly installments. So, you knew when they announced the October dividend that they were also committed to the November and December dividends at the same rate. Knowing this has saved me some angst because I know I only have to worry about the first dividend of each quarter. No reason to worry every month about it. GLTA

  • Reply to

    OIL squeeze coming....

    by bearnobull Nov 28, 2014 11:26 AM
    bbandassoc bbandassoc Nov 28, 2014 12:10 PM Flag

    My brother-in-law works for a group that manufacturers drilling equipment and he said the orders started being cancelled and new orders started drying up when WTI dropped below $80. And, I agree, a severe, quick drop will drive supply out of the market quickly and set the stage for a rapid snapback in prices.

  • Reply to

    investor on the ledge code red

    by colonelflashmanvc Nov 27, 2014 10:58 AM
    bbandassoc bbandassoc Nov 27, 2014 12:45 PM Flag

    It seems to me that they need to come up with about $350M ($70 oil) to $450M ($60 oil) in 2015 in cash flow to fully cover the distribution v. their Q414 guidance for cash flow. Perhaps $100M to $200M of this comes from getting past the transition costs from high-decline to low-decline assets to be experienced in Q4 and simply completing the outstanding asset deals. They mentioned this on the call, but did not give an amount, so I am assuming $25M to $50M of the Q4 cash problem is associated with these items. If it is, then, they still need about $150M to $350M at those oil prices to have a 1X distribution coverage. Much, if not all, of this should come from further reductions in maintenance cap-ex. The remainder must come from among unit buybacks that reduce distribution requirements, accretive acquisitions or asset trades, operating at sub-1X distribution for a few quarters, or cutting the distribution. Personally, I think LINE will not cut distributions so long as oil stays at $60 or above for the next couple of years. They will likely run several quarters below a coverage of 1X while they get costs out of the system and possibly buyback units. If they do cut distributions though, every 10% cut produces about $100 million in savings, so a 20% cut would go a long ways and still provide a return of more than 10% at the current stock price. Finally, if OPEC would simply enforce their 30M barrels per day quota, the problem would still be resolved by OPEC as they are running closer to 32 million barrels today.

  • Reply to

    Suddenly huge deman for LNCO and LINE stock

    by crk00 Nov 26, 2014 4:03 PM
    bbandassoc bbandassoc Nov 26, 2014 4:42 PM Flag

    I have not looked to see it, but if there is that kind of volume, I would bet it is related to ETF's rebalancing to accommodate the loss of KMP.

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