--- The Company intends to use the net proceeds from the offering to repay a portion of its indebtedness outstanding under its senior secured revolving credit facility.---
I would guess it is a smart move on management's part. They are extending the repayment date at a fixed rate out into the future "perpetually". It will also eliminate problems in a credit crunch similar to what we had in 2008-9. Rising interest rates down the road should not effect them either.
IMHO any time someone is willing to lend you money at a reasonable interest rate "forever" without a repayment date you should take it. And if you are in a business that pays out most of their distributable cash flow to unitholders and plan to grow and need additional financing from time to time it makes a lot of sence.
Vanguard Natural Resources, LLC (VNR) (the “Company”) today announced that it has commenced a public offering of Series C Cumulative Redeemable Perpetual Preferred Units (“Series C Preferred Units”) pursuant to an effective shelf registration statement on Form S-3, as amended, filed with the Securities and Exchange Commission (the “SEC”). The Company will grant the underwriters a 30-day option to purchase additional Series C Preferred Units. The Company intends to use the net proceeds from the offering to repay a portion of its indebtedness outstanding under its senior secured revolving credit facility.
Morgan Stanley and UBS Investment Bank will act as joint book-running managers for the offering.
But a stable price is beneficial to me. At $29.37 the yield is 8.58%. At $33.04 the yield is 7.63%. Thats about a 12.4% difference in my favor.. Since I am still dripping and buying if it is favorable to me to do so, thats what I'm doing. Thats how my portfolio grows, and I am currently getting 12.4% more value for the same dollars I spend. In reality I am helping VNR by creating a market for disgruntled unitholders that are willing to sell to me at these depressed prices.
You are right-I am right. We are looking at two different things.
I don't need an increasing unit price to make money. All I need is a stable price and continued monthly distributions that I want to purchase additional cheap units. My growth comes from additional units paying additional distributions. I have been fortunate to be able to have some securities that generate income that I currently don't need so I can let them grow. The distributions on VNR are mostly tax deferred so they grow uninterrupted by current taxes
IMHO They have performed very well for the last few quarters. They have continued to pay the distributions which keep adding additional units to my portfolio totals. Since I am not planning to sell, the reasonably stable unit price gives me more units added each month and each additional unit gives me more investable dollars into additional units for the months going forward. The traders and the "Kaisers" of the world create the dips in price every so often to provide a lower entry price when the monthly drip comes and/or a buying opportunity if the price is lower due to what they say. If Mr Kaiser really knew what was happening with LINE-KMI or VNR he would have all the money he needs in his portfolio without having to write "sage" articles tying to scrounge money from people's misery caused by his outrageous comments. If the VNR price remains at the current $29.29 until the drip day of Sept 15 I will receive 12.8% more units that if the drip price was the recent high of $33.04. And that 12.8% additional share will compound month after month. and will give me an additional 12.85 units month after month compounding again and again as long as the price trades at $29.29 as opposed to $33.04. . Since I'm not interested in selling, the only thing I give up are "Bragging Rights At Cocktail Parties"
My vote is for stable unit prices and continuing distributions that from time to time are raised when prudent.
Listen to the CC this afternoon at 4:30 PM. That will give you a better understanding if the LONG TERM potential that is here with ITI. BIG Bucks can probably be made here if you recognize the potential and play your cards right. I believe there is a lot more value in ITI shares that $2.20. I'm looking for $5 to $10 going out 2 to 5 years or so. Today's CC will give out more insight as to thefuture
The key work here is Patience.
You haven't done your "due diligence" if you are concerned what happens based on what he dreams up and how VNR trading stands up for the first two hours today. My investment time frame is 'forever" As long as management runs the business in a prydent manner and is able to pay the distributions and increase them every so often, I will continue to be invested here and drip the distributions month after month after month. The unit count in my portfolio will continue to grow month after month. The unit price will fluctuate because there are people that are concerned about minute to minute trading and base their decisions on what others do.. Price is what you pay--Value is what you get. I believe there is more value in a VNR unit than the price it is selling for.
So I continue to buy
It is now the beginning of September. It might be time to pick out the color of your wife's new Lexus for next year. she must be getting tired of the ol the old one by now.
Keep the faith. I believe The best of MWE is still in the future.
I remember the day I first bought MWP over 10 years ago because I took my wife to dinner at a local Chinese Restaurant and received my fortune cookie with the following message in it
"A financial investment will yield returns beyond your hopes"
I taped it on my computer screen and I look at it whenever it gets a little rocky out there.
Judge Learned Hand served for many years as a judge on the US Court of Appeals. He became famous in his day for his opinions and rulings of Federal Taxes .
He his probably most famous for the following:
Famous Quote from Judge Learned Hand
"Anyone may arrange his affairs so that his taxes shall be as low as
possible; he is not bound to choose that pattern which best pays the
treasury. There is not even a patriotic duty to increase one's taxes.
Over and over again the Courts have said that there is nothing sinister
in so arranging affairs as to keep taxes as low as possible. Everyone
does it, rich and poor alike and all do right, for nobody owes any
public duty to pay more than the law demands."
Fear brings two choices for everyone.
1) The fear of loss of money and running for the exit in the hope of reaching the exit before others and getting trampled
2) Keeping your wits about you, and figuring out how to adapt to the situation and make money out of the
fear of others.
Everyone has the opportunity to make that choice. The successful investors are the ones who make the right decisions while the poor investors will always talk about how bad their stocks were while never mentioning the poor decisions they made at critical times.
A split does not add value to an investor's position. Would you rather have a $1.00 Bull or Two Half Dollars?
The price is what you pay. The value is what you get-----Warren Buffett said that many years ago. He never split his Berkshire Hathaway stock for the past 50 years. Now it's trading for over $200,000 a share.
I have no inside knowledge, but I'll bet you a Diet Coke that they have been selling units for a week or two and are stepping up the money raising as the price increases.
Frank and Nancy didn't get MWE to where it is now by waiting for us to think about the opportune time to do anything. They know the markets and what they need.
We, as unitholders, are just tourists along for the ride,
Not necessarily. Frank Semple and Nancy Beuse never wait for the last minute. They probably have been selling units into the market for a week or two. They have been doing it for a few years and They are pretty good at this stuff. They recently announced 4 new processing plants for Rex, and we don't know what has not been announced yet. Frank says the Marcellus is a once in a lifetime opportunity and he doesn't want to miss it. He and John Fox need the critical mass of growth to fight off predators like Richard Kinder if he comes knocking on the door. The more MWE is worth the better deal he can make somewhere else that would be more tax friendly for MWE unitholders than dealing with Richard Kinder if it is necessary. Don't think that Frank Semple doesn't know the sharks are circling in the water and has made plans to combat unwelcome visitors knocking on his door in the middle of the night.
Patience. A lot more chapters to be written in this book before Frank and John are finished
They are too young to retire and too old to start all over. They also wouldn't be good employees working under someone elses orders after all these years of being the general in the battle.. And if that wasn't enough reasons, I'm sure they aren't interested in paying a lot of taxes and buying treasury bills with the balance to live on while they play checkers in the park on sunny warm days.
The unit price is only important, when one is interested in selling. If not selling, then price is immaterial. If one sells, it opens you to transaction friction costs which include commissions and Fed and State taxes to reduce your capital. Another even more important friction cost is the loss of the mostly tax deferred income, and the necessity to reinvest the net amount after taxes in other tax deferred investments to replace the missing income. That's not always possible if the friction costs are high.
A stable price allows a drip plan to multiply your mostly tax deferred position without adding additional cash. At the current $30 price a drop to $26 would give you an additional 13.33% increase in additional units coming in on a drip plan and they all will be grinding out additional income into additional units as long as the price remains depressed. When you need money somewhere down the road,, you stop the drip and you will have a whole lot more money coming in each month that now. A lot less drama and trauma then selling and paying transaction friction costs and worrying if the price will go up to $36 or down to $26.
The only thing you lose at a $26 price as opposed to a $36 price is bragging rights at a cocktail party.
=====There's nothing about this company that will power it PPS back over 40 bucks,====
$40 is just a goal. The number really is not that important. What's important is all numbers higher than where it is now. $20 is better than $15- $25 is even better than $20- and so on up the numbers ladder to $40 or more. Since I have already removed all my money plus a mid 6 figure profit from ACAS and I currently hold a bunch more with a $4.70 cost basis and no desire to sell, all I really want is stability and if possible a dividend down the road, but it isn't really necessary as my wife and I are currently living on about 43% of our dividends and distributions that we receive. And that is after Fed and State taxes and gifts to family. We have no debt. The about 57% of our market income not spent is being re-invested in drip plans. We are retired over 11 years.
You might be micromanaging too much here.
PSEC lends and invests in sub-prime companies. If they weren't sub-prime they could go to a real bank and pay a little less. This is what PSEC does and that's what you bought when you bought PSEC. With sub-prime lending you should expect a bump in the road every so often. When one occurs, it is time to jump in and buy cheap shares when Mr Market offers them to you.
PSEC is not going broke. Those that understand will prosper. Those that don't will lose out.
Since I'm not planning on selling, a tax-free exchange is fine with me as long as the buying company is offering a stock that is worthwhile owning and pays a dividend that is sustainable going forward.