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Kinder Morgan Energy Partners Message Board

donedealer 15 posts  |  Last Activity: Aug 21, 2015 9:58 AM Member since: Jul 2, 1998
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  • Reply to

    Ive been in ACAS for 5 years...but

    by blankwillie Jun 2, 2015 10:02 AM
    donedealer donedealer Jun 3, 2015 8:37 AM Flag

    What amazes me are the posters who express a desire to hold on to pieces of the spin off on a long term basis . This despite the fact that this company is being run primarily for the benefit of the management not the shareholders. ACIN will be a fee laden BDC with the prospect of little growth (selling at a discount to NAV) and below market returns. ACAS will continue to be run for the benefit of the management: a whole new round of stock options and super generous compensation plans unrelated to either the performance of the company or the stock. If the stock pops take the money and run..

  • donedealer donedealer Jun 23, 2015 1:46 PM Flag

    NMB

    After the exercise of all the options and the spin off it will be time to fill the tank up again with another round of option grants. What I cannot understand is the apparent plan for many posters to continue to hold shares in the this pieces of this company post spin off.
    The message here is clear: this company is run primarily to enrich management not to enhance shareholder value. This stock is not selling at a discount because the market doesn't understand the company, The discount is because the market does understand the company. It also knows that they are facing sales of about 40 million shares from option exercises before the spin-off. This company is not a hold but is a sale on any pop in price. .

  • donedealer donedealer Jul 13, 2015 12:08 PM Flag

    Management wants this spin of as much as you do. They will exercise all their options before and then will afterwards receive fresh option grants and generous raises and bonuses for a job well done..

  • Reply to

    Not a Fool fan, but...

    by nosurebet Jul 15, 2015 12:09 PM
    donedealer donedealer Jul 15, 2015 12:54 PM Flag

    I agree. Short term there is a double whammy in the dilution in NAV from options coupled with the reality that nearly all there options will be exercised before the spin off with most shares then dumped on to the market,
    40 million plus shares of headwind is a big number, This will put a lid on the stock price, Loner term I fear that post spin off there will be excessive stock option grants and increased compensation. Conclusion: most holders are waiting for an opportunity to get out. ACAS is run for the benefit of management not the shareholders.

  • Reply to

    Boid Prediction for end of this week Price

    by allenstanson Jul 14, 2015 9:28 AM
    donedealer donedealer Jul 15, 2015 3:59 PM Flag

    Do you also forecast the weather?

  • donedealer donedealer Jul 30, 2015 4:58 PM Flag

    23 cents equates to 92 cents per year. Earnings of about $1.30 are needed to support the current market price and about $2.00 to support a market price of about $20. This is why ACAS sells at a substantial discout to NAV.

  • Reply to

    New 52 week low

    by blankwillie Aug 3, 2015 9:42 AM
    donedealer donedealer Aug 3, 2015 11:12 AM Flag

    NMB

    I don't follow your math. If ACIN has NAV of 13.33 then ACAS would have NAV of 25% of that or 3.33. The combined NAV 16.66 is well below my projection of about 19 (assuming stock buy backs equal to option exercise proceeds).

    Next, I assume that the combined companies will sell for about 11 times combined earnings. If ACIN could earn a dollar it might only sell for 11 not 12.

  • Reply to

    New 52 week low

    by blankwillie Aug 3, 2015 9:42 AM
    donedealer donedealer Aug 3, 2015 12:47 PM Flag

    NMB

    I am lost. Are you saying that the combined NAV of the post split companies will not be equal to the NAV of the pre-split ACAS?

  • Reply to

    New 52 week low

    by blankwillie Aug 3, 2015 9:42 AM
    donedealer donedealer Aug 3, 2015 1:56 PM Flag

    NMB

    Thank you for the explanation. I have assumed that the accounting would probably change valuations. However, I am working with a pre split value of hopefully about $19 per share of which 80% will go to ACIN and 20% to ACAS. The question is what discounts will be applied to these values? Presently, the discount is over 30%. My hope is that the ACIN portion will be no worse than 20% for a market value of about $12. Hopefully ACAS will be no worse for a value of at least $3 resulting in a combined value of at least $15.

    However, all of the is based on the earnings of the combined companies. Using a PE ratio of 11 it will require at least $1.36 of earnings to support the $15 value.

  • Reply to

    New 52 week low

    by blankwillie Aug 3, 2015 9:42 AM
    donedealer donedealer Aug 3, 2015 2:41 PM Flag

    NMB

    Thank you again. To summarize, you believe that there will be about $1 dividend from and $12 value in ACIN but are not sure as the the earnings or value of ACAS. However, it would appear that in order to achieve a $3 value, for $15 combined value, it would have to have NI of at least $.25.

  • Reply to

    New 52 week low

    by blankwillie Aug 3, 2015 9:42 AM
    donedealer donedealer Aug 4, 2015 12:54 PM Flag

    NMB

    I hope you are in the ballpark. Regarding the market, I continue to be bothered by the terrible performance of FSAM. Granted, they are a bad apple but some of it could rub off on ACAS.

  • If the stock is at least 15% below NAV. Assuming $13 price this is about 23 to 46 million shares which should substantially off set dilutions from stock market exercises.

  • donedealer donedealer Aug 6, 2015 2:08 PM Flag

    NMB

    I agree. My focus is on NOI before tax. It climbed 21% from Q! to 34 cents Q2. This is an annual rate of $1.36. I hope it can be increased to $1.60. If $1.20 is allocated to ACIN it will support a price of at least $12.
    With 40 cents available to ACAS (even with a tax expense for accounting not cash flow) it wll result in a market value of at least $4.

    In summary, I believe that the total values of the post spin off companies will be at least 10 times the combined NOI before taxes. NOI is the driver of value not NAV.

  • donedealer donedealer Aug 6, 2015 2:45 PM Flag

    lenyw

    Note tha tI concluded AT LEAST 10 times NOI. NOI could be higher than $1.60 and I believe the multiple could probably reach 11 times.

    The principal take away from my calculation is the focus on NOI not NAV. For over a year now posters on this board have focused on NAV and the discount from NAV while it is lear that the market has been focusing on anemic earnings. NOI drives market valuations not NAV.

  • Generally prohibits a trade on the open or the last 10 minutes of the day. Short sellers know this. Note the sharp fall off for ACAS in the final minutes of trading yesterday and the opening this morning. If you are a buyer this is when you want to time your purchases. If you are a seller you want to avoid these times.

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