NDLS reports Wed after the close, in the $26 range, around 40x '15 earnings. Seems it is in the range of fair value. Only $800 EV for what could be a great franchise. May buy some before the report and see what happens. High was high $40s.
KMI paying $2 next year with 10% div growth through '20, not many companies can make that forecast. Seems a 4% yield with the assumption that rates don't get out of control, a $50 stock next year, $39 today. DNR says it will pay 60 cents next year, that's 3.6% on today's price. KMI could buy DNR, combine the ops and spin it off. Would have Permian, Rockies and GC.
Read the Forbes article, still doesn't answer the question of why not moving KMI into KMP. Seems the tax basis will transfer to KMI and dividends initially will be partially a return of capital. Seems the MLP form is still more advantageous.
Good move on KMI, good timing. I wasn't sure how the deal would go, thought they might combine at KMP. Will be interesting to see what the comments are. Not sure about all of the tax implications. It may have been that Kinder wanted a c corp for estate purposes. Not sure they will much tax liability for a few years. OKE I would bet merges with someone. Still think there will be maybe five players. MWE and MMP are prime candidates too. PAGP will end up with another entity. SEMG should go and think CEQP will do something, they said as much on their cc. Also Targa. I would bet the landscape is much different a year from now. I still don't see the end of the shale boom, it will happen but seems a few years away. if KMI doesn't reach $40 tomorrow, probably still a good buy. Could be $45.
Knew it was coming. Own KMI, KMP and EPB. KMI will pay $2 div after deal done, kind of think they should get a 4% yield, that's $50. Should be over $40 tomorrow it seems. KMI in the low $30s was a gift. They should have done this a long time ago. I do think the whole sector will consolidate this year with maybe four or five major players. Would think the whole sector is up tomorrow. Article in Barron's today on the MLP sector, that will help. I bought more PAGP Friday. Think they will do something soon. MWE probably ends up with someone else, MMP also, OKE also. WMB, ETE, KMI, EPD are the major players. KMI has a $140 billion enterprise value, amazing.
I need to do some reading on the litigation, the reserve is non cash, who knows what the result will be, if any. They did say that they are happy with the Utica results and said they see the Utica returns matching the Wattenberg returns. On the set back thing, I sense the people of CO don't want to destroy jobs. And the FERC is calling for an open season on the White Cliffs pipeline, there is not enough pipe out of the basin now. They did say that 15% of their production is non operated, Noble I assume, and that number has been bigger than expected. Having Noble there seems a good deal. I would say that we won't see the 50s again unless the energy market falls apart. It was 37 degrees here this morning, stay cool.
The talking heads on CNBC are irritating, it's almost as if they are disappointed that the market is doing well with all of the "geopolitical" events, which provides reporting drama. One thing I've learned in the past decade and half is the geopolitical events have almost always given us a buy opportunity. The Iraq situation is sad considering the lives we have lost there, but probably shows that global oil supply will never be what it should with the instability the producing countries have. And the 10% correction the gurus having been talking about still hasn't happened.
An aside, DNR is a $25 value selling for $16 but I can't figure out how you produce a catalyst that gets you there. A 3% yield next year with 8% increases annually is o k but there are better choices out there. PAGP yields 2.5% and will increase 25% a year for a few. An activist investor might be able to do something.
Traded CSTE for PAGP, still think CSTE has great long term potential but feel PAGP is the best energy infrastructure co. Well managed, low debt, can do a deal at PAA and dramatically move the unit PAGP unit price. Like dist increase potential of 25% annually for next few years even without a deal.
Seems PDCE could run several dollars over the next few days, assuming no market events. The risks that knocked it down don't seem that big a deal considering their asset potential.
The litigation charge was $21 mm, 37mm shs, 57 cents of the miss is that. They didn't say much about the litigation, hard for me to judge the merit, would bet it goes away with a settlement. The charge sounds very subjective and obviously non cash until paid.
Again, they raised ebitda by $100mm, Credit Suisse had $335mm this year, mid point of new guidance is $415. CS had an $86 target based on NAV but can't see how the target doesn't go up. Again, this seems a great value.
The litigation and charge is new to me. EBITDA guidance was raised almost a $100 million to $415 million. At 8x that, not unreasonable for a company with two strong core plays and reasonable debt, now $677 mm. At 8x multiple, the stock should be $71. Still think they are one of the best bets in e and p. The set back issue still is there, now the litigation, they reserved $21 mm, and the price differential. CS had them at $335 ebitda this year, $520 next year and $707 in 16. Add $100 mm to next year, at 8x, add a couple of $100 mm to the debt, and you get a stock price of over $100 next year.
Listening to call, everything sounds great. Haven't really looked at eps, they did have a litigation charge, not that familiar with the suit, something to do with partnership roll ups. Still think the next couple of years look great both in Wattenberg and Utica. Guidance upped 10%. Still think a buy under $60 will look good a year out assuming oil stays around $100. The pipe out of the area is constrained, double digit differential, that should help bottom line. Thinking about buying my traded shares back.
Listening to PAA/PAGP cc, don't hear any concerns about growth, not sure the stock price weakness. $7 billion of portfolio projects. Well managed company.
May try another trade today with PDCE's report tomorrow. Should probably quit while ahead.
I think DNR sold for strategic reasons, the focus on CO2 development but there are others on this board that know much more about it. The costs are a concern but seems they will come down, the play is developing. I am encouraged that HK is active there, there strategy has been to find the more profitable oily plays to develop. They liken it to the EF shale but has some clay problems. GDP is higher risk than others, PDCE for example, but the upside could be considerable with 300k acres, how much is prospective remains to be seen. I really like PAGP, think it will do a deal at PAA and PAGP will be up big. Good luck.