It's not some fly by night company that people pump and dump. They've been around since 1916. Have you ever looked at their website and seen their product line? Their specialty lubricants are used in a wide range of applications. The RIN prices that hit them badly have dropped like a rock, ever since the EPA announced that they were reducing the amount of ethanol blend next year for the first time ever.
SDRL ended the day down $0.30/share, not $1.25 or whatever magical number the bozos at Yahoo, or the yahoos at Bozo made up. Not to mention the screen freezes, disappearing symbols, etc., etc. Katie Couric gets engaged, starts getting laid again and takes a job with Yahoo, who's only real value I can see is their 25% stake in Alibaba.
CF owns 75% of TNH but I recall a story that they bought a Canadian nitrogen producer months ago because, due to global warming, Canadian farmers are growing corn for the first time and CF was teaching them how. Found the story, from August of last year:
"American fertilizer company CF Industries is poised to take full ownership of Canadian Fertilizers Ltd., Canada’s largest nitrogen fertilizer plant. "
A lot to consider- more nitrogen plants being built, including one in the US by Orascam, Ukraine in a dispute with Gazprom over unpaid bills and they and China may need the natgas for winter heating, and China's nitrogen fertilizer is produced from thermal coal, which is rising in price. UAN has also increased capacity, and the EPA may lower ethanol requirements for 2014 for the first time which means less corn grown. However, although soybeans produce their own nitrogen, there is a recent theory that perhaps nitrogen fertilizer applied would increase yield per acre.
It is, of course, the revised ethanol rules for 2014:
Forget raising the national ethanol blend in standard gasoline to 15 percent (E15), the Environmental Protection Agency has, for the first time ever, proposed reducing the ethanol requirement in the American gas supply.
The reduction (technically, a not-as-big-as-possible increase) was proposed Friday (PDF) and, according to The New York Times, represents something of a head-scratcher for the ethanol industry, despite being expected. Basically, what's happening is that enough ethanol is being produced to fulfill the EPA's current ethanol requirement. Most of the ethanol is used to make a 10-percent blend with gasoline (E10), and some is used to make E85. The Energy Independence and Security Act of 2007 and the Renewable Fuels Standard say an ever-increasing level of ethanol should be used in the national fuel supply, but the EPA has had to adjust the biofuel mix because of the "blend wall." This is the level where we can't pour any more ethanol into the gasoline supply because it would push the overall blend above 10 percent (plus limited use of E85 and E15). Therefore, the EPA is recommending that the US add 15.21 billion gallons of ethanol to the gasoline supply in 2014. That's still within the 15-15.52 billion gallon projected range, but in the lower half. In the proposal's language:
[The] EPA is proposing to adjust the applicable volumes of advanced biofuel and total renewable fuel to address projected availability of qualifying renewable fuels and limitations in the volume of ethanol that can be consumed in gasoline given practical constraints on the supply of higher ethanol blends to the vehicles that can use them and other limits on ethanol blend levels in gasoline.
In other words, since y'all aren't using enough ethanol, we're going to cut back. The move was applauded by the oil industry and scoffed at by many farmers.
Most of the ethanol in the commercial supply is made from corn, but the EPA also regulates cellulosic ethanol, and there the news is even worse for biofuel supporters. The EPA said, "Based on an assessment of the available volumes of cellulosic biofuels, EPA is proposing to set the cellulosic biofuel standard at 17 million gallons, significantly lower than CAA target of 1.75 billion gallons (PDF).
Since this is just a proposed rule, there is still time for the public and private companies to weigh in. The EPA will release details on an upcoming hearing in the future.
I'm not too worried about it- long term this stock will do fine. Because their product line is so diversified they are not as reliant on fuel and RIN prices will drop next year- cellulosic ethanol and biodiesel will replace corn over the long term as there just isn't enough arable land to grow food and fuel. Besides, the growing of corn is destroying the prairie land in the Midwest, using more fertilizers and releasing carbon dioxide from the soil.
"Five million acres of land set aside for conservation – more than Yellowstone, Everglades and Yosemite National Parks combined – have vanished on Obama’s watch.
Landowners filled in wetlands. They plowed into pristine prairies, releasing carbon dioxide that had been locked in the soil.
Sprayers pumped out billions of pounds of fertilizer, some of which seeped into drinking water, contaminated rivers and worsened the huge dead zone in the Gulf of Mexico where marine life can’t survive.
The consequences are so severe that environmentalists and many scientists have now rejected corn-based ethanol as bad environmental policy. But the Obama administration stands by it, highlighting its benefits to the farming industry rather than any negative impact."
I don't know where you are getting your info, but their current dividend of $2.74 X 69.63 shares= 190.7862 million and their cash flow is 201.01 million. The RIN expense has dropped dramatically and will continue to due so in the future as the EPA is supposed to lower the amount of ethanol needed to be blended into gasoline in 2014, and there are both oil companies and conservationists that want to eliminate the ethanol program completely as it isn't working except to destroy the land by planning more corn. There isn't enough arable land to sustain ethanol production and food. The San Antonio refinery will come online and so will the diesel Baaken one over the next couple years.
Western Refining sucks as a company. They are restarting a 16 inch 57 year old pipeline to carry crude oil that runs through a 5,000 person town in the mountains of New Mexico. It comes within a few feet of a senior center and 600 feet from the elementary school. Since it runs partly through BLM land they oversaw the Environmental Impact Study and did not take public safety into account. Read more by Googling "Sandoval Signpost." Find out how much the BLM sucks by going to the Facebook page "The BLM Sucks."
Long term, this is a good stock to hold. Too many computer driven trading platforms and fund managers put too much emphasis on one or two quarters. Their product mix is spread across many industries and their cash flow adequately covers their current dividend and they are not nearly as leveraged as many other MLPs.
Read CF Industries earnings report, who owns 75% of TNH. The fall application of nitrogen is late because only 59% of corn has been harvested as opposed to 91% at this time last year. As for the Chinese exports, most of their nitrogen based fertilizer comes from thermal coal, not natural gas. Thermal coal prices have already begun to head back up and tat will, in the long run, make Chinese nitrogen fertilizers more expensive.