Anyone who expected gangbuster guidance should understand in the legal climate of today there is no percentage in being overly optimistic because there are too many lawyers willing to sue any corporation for the crime of believing too much in their corporation's capacity and ability to deliver.
In other words, better to walk the walk than talk the talk. This CEO learned from the late great Dan Duncan, EPD's founder. This CEO was a former EPD division CEO. I think he knows what he needs to do in 2014 because there is a lot of new assets brought into CMLP that have to be properly digested. I am just starting to read the presentation.
I will say go to page 11 of the presentation showing 2014-2018 identified organic growth opportunities. Take note of the 5-7x ebitda multiples on the "all-in" growth. Cumulative projects are over $1B and I suspect more projects will be announced over the next few months.
My hope is CMLP will spend 2014 digesting and growing and then they look to do a Crosstex/Devon type transaction which has completely changed the midstream MLP/upstream E&P corporation relationship.
My hope for 2014 is CMLP can reach investment grade status but first must establish $500M of ebitda on an annualized basis.
Volume is huge right now. Perhaps year end profit-taking in advance of year end for those investors that do not have long term holding plans for the new airline.
I have looked at DVN's presentation. I also note XTEX stock started moving higher on news of DVN's big acquisition. It will be interesting to see how much additional/new organic projects become necessary for DVN to deliver to markets. DVN makes clear in their presentations the new ability to focus on E&P because they do not have to have additional monies to do their own midstream build out.
I have said this before and I say again this is a game changer for the MLP industry that previously had E&Ps align with an MLP; dropdown sales by the E&P. This is in essence a 100% dropdown/JV MLP being created where DVN's interest is to have its majority owned MLP perform as much of its own needed future growth as is possible. Over time, I assume DVN will want to sell down or sell off its MLP interest retaining its GP interest.
Organic growth is simply internally generated growth. From what I have witnessed most organic growth projects are completed at significantly lower ebitda multiples than acquisition growth. This generally translates into higher accretion and perhaps higher distributions to owners.
Disabledretiree this is common language which you should want to understand if you intend on investing in the MLP space for any lengthy period of time.
By now, surely you understand that book value has no meaning. It is backward looking and if you look at what has happened to ARR's book value over the past year there is nothing to suggest that a bottom can ever be put in when rising interest rates translates into the need to de-lever meaning forced losses to the extent of forced sales of paper that was not hedged and then continuing cuts in dividends.
NLY has been providing the best clue of reality because they initiated de-levering and dividend cuts a year before the May 2013 debacle and NLY got hammered just as hard as the rest of the sector.
I saw the exact same rationalizations in a post when NLY was around $16 with BV of around $18..... does it really pay to wait?
You keep believing QE is the only thing keeping the economy going. All of you are deluding yourselves into denying the obvious which is interest rates are being adjusted from near zero to a higher level, closer to something referred to as a "market rate" interest rate.
How many of you have ridden Mreits down the hill to the point where it will take a multiple of years to recover lost capital in the form of dividend income that BTW is going to be reduced next quarter and probably the quarter after next?
False belief systems and all of you denying where we are at in the interest rate cycle and yes it is a cycle and we are now moving from trough rates to a higher market rate.... has resulted in you being snookered but good. Smart money who understood AGNC's first quarter results were the beginning of a nightmare scenario. Smart money also understood why NLY was starting to de-lever and reduce dividends over a year ago... the smart money be gone and that has left to dumb money to rationalize why they should keep watching their capital erode and getting your faces torn off.
An SEC Form 3 filing shows Cooperman Managed and Investment entities now owning 5.190M shares as of today's filing. This is after 9/30/13 report showing increase of ARP from 4.182M to 4.843M. In addition he personally owns and family members own an additional 1.2M+ shares.
This makes Cooperman through all of his various ownerships in ARP a 10% owner now.
This happened to XTEX in the 4th qtr of 2012 after they made a major acquisition and then set out on a major organic capex program. Then Credit Suisse upgraded and XTEX went down. Then Cramer got behind XTEX and still didn't do much. Then it started to move.
Just be patient. The market will get these two upgrades; I am convinced you still have former NRGM holders selling out of CMLP. NRGM holders were totally frustrated by their ownership. That MLP was not a very good performer. CMLP is being operated by a former EPD division CEO and he remembers when EPD bought Teppco... an underperformer EPD was criticized for the acquisition until they proved to the market that they knew how Teppco would fit so well into EPD.
I added shares yesterday and today. I believe my patience will be rewarded. It does not happen when you think it should happen. But I expect these two upgrades to become more significant because CMLP was not a well covered MLP prior to the NRGM merger and Arrow acquisition. It takes time and I for one am very happy to get more shares at this yield to cost of almost 7.75%.
There are always a fair share of investors that maybe owned Inergy that now want to sell there shares. I have always seen downward pressure during the early months after mergers. All I know is I have been using this period to build my position because it is as predictable as when an MLP announces a secondary.... becomes an opportunity to add more shares if the price looks right.
This was a complicated merger and I am convinced investors may not get all of the synergies yet. Fine by me... let me finish building my core position and add some more for the trading side and all is good.
There are a lot of investors post merger that want out. We will continue to see persistent selling pressure in CMLP. In a few days, I believe today's upgrade will be reconsidered by investors but on a day like today.... upgrades mean nothing.
Garbage BDC ETF. Better to pick best of breed rather than reckless high yield BDC.
I don't like most of the BDC representation in ETFs or mutual funds and I am not a fan of 2/1 funds... I have been in ARCC since APR 09 and I have been a very happy camper investing 1/1.
CLI has been dead money for well over a decade. They simply are stuck in dead end markets and have never capitalized on the hot markets in NJ they clearly dominate. This management team is the gang that never gets it right and its time to sell out to a management team that can better realize value from the assets rather than continuing to overpay for an extremely mediocre management team.
I think a lot of short term traders came into LCC when the stock had its mini-crack after the DOJ threw their wrench into the works. For them this was a huge short term gain and they take their money and run and are replaced by new short and long term investors. There will be upgrades and I believe next price target for combined American is $35.
They said as much as $10 upside. I have been going with $35 and I believe S&P will upon completion of their work increase their p/t to $35 combined from $30 and maintain strong buy but we shall see who upgrades and where they believe the new American can trade.
This is on my Schwab website news headline section. I usually see these before they make the general rounds for whatever reason. I can't link it out but you will probably see it on Minyanville shortly if not by now.
Wow! I was thinking $35 would be the next price target assigned to the combined.
This will all be much about nothing IF MWE starts the distribution growth rate that is estimated for 2014.