I could see it but no idea on price, except that SDRL may have nothing to compel them to pay a premium to buy the NADL shares it doesn't own. Complete ownership of NADL rigs might make it easier to monetize the assets via dropdown. SDRL has a dozen or so rigs under construction and they do need a reliable source of cash to help pay for them.
If it wasn't my next egg I was talking about, I would go for BDCL.
There's a good read on Seeking Alpha today discussing the case for XOM as a retirement investment. I have a hunch the dividends of the oil majors are going to be under pressure and increases may be hard to come by... except for XOM. They are rock solid.
For obvious reasons I have been reviewing my strategy to stand pat and rely on the strength of my dividend shares to weather the storm. First and foremost, I need the dividend income and don't feel I can convert, say, 30% of my holdings to cash and take a 30% hit to my dividend income without being sure how I would make up the lost income or how I would reinvest the money if, when and for how long the bear market were to continue.
For my own benefit and to put this into perspective, I looked at the dividend picture of the 34 stocks in my portfolio over the last 12 months.......
One stock cut its dividend. It now yields 22.28%.
13 stocks have paid the same dividend for the last 4 qtrs. Average yield = 12.05%
10 stocks increased their dividend one or more times. Average yield = 7.55%
10 stocks increased their dividend every quarter. Average yield = 6.25%
So, while the principal may suffer, hopefully only in the shorter term, I can maintain and quite possibly increase my income by not selling the underlying shares. FWIW, that's one person's plan. Time will tell.
Why only "one more kinda shake-out day" for oil? Why not two. Why not two weeks? Two months?
Simpleton that I am, I'm going to ride it down, if that's what actually happens. I'll hold my breath and follow the bubbles (dividends) to the surface. I haven't yet heard that stocks don't follow the dividends up, eventually... except maybe in Australia? Of course, it's a little known fact that water flows upstream in Minnesota's Red River of the North.
I think a bear market is the time to be reinvesting dividends. Still, I am DRI'ing on only one of four managed IRA accounts so I can pick my spots when putting money in. August is my biggest dividend month by far.
FWIW, I have been wondering about the susceptibility of a stock to shorting and the question, who is there to stop or mitigate the impact of a short attack? And how does that work to keep a stock from tanking in a way that's out of whack with its fundamentals or comparable performance with its peers....
NMM and now GLOP (even more so) have shown high, sustained levels of short activity. What does that tell us? Is there "someone" there to intervene to prevent a short attack (or take advantage of the low price and buy at a certain level)? The parents of each (NM and GLOG) have limited means to intervene as they themselves are under short attacks. So, they are vulnerable and get hit. Institutions and funds seem to be the "someones" who have to step in and buy more when the price gets low enough.
In contrast, HMLP has ZERO short interest. Presumably that means there is "someone" there to buy the stock if it gets under attack and greater price stability would be the result. Hoegh, the parent and GP of HMLP, has the wherewithal to step in if needed. KMI has also survived short attacks and while down, it is not down more than peers, and if the price gets too low, there are funds and institutions who will start buying, not to mention Rich Kinder, a man of no small means.
Which brings me to SDLP. It has low short interest. Why is that? Could it be that there are potential buyers out there to defend the stock? Maybe not SDRL, but John Fredricksen could certainly afford a few million shares now and then. Goldman and Oppenheimer are also BIG holders of SDLP shares. Wouldn't they step in to keep the shorts from messin' with their holdings? Given SDLP's yield (near 19%) and its high coverage ratios for 2015 and 2016 (1.4X) I have thought about trading one weak sister (LNCO) for another (SDLP). It's a thought.
Not offering advice, just input. But, as an on and off again shareholder of RSO (since 2009) I am now out of it, for good. STWD and BXMT are my REITs for the foreseeable future.
Your deer in the headlights comment is strange. It seems to say that it has not occurred to you that an income investor who owns an income stock like GLOP (8.73% yield) that is in a sector (LNG midstream) that is on the cusp of a period of revenue growth and for which management has recommended a 7-10 percent Q3 distribution increase (payable Nov) is capable of making a reasoned decision to continue to own the stock rather than panic-sell it at a time when it is under pressure due to market games that in all likelihood have no relationship to the underlying value of the stock. You sound as if you think dividend investing is a new concept, which of course it is not. It is fundamental. It's productive for income. It's also productive for growth for a patient investor with a long-term perspective. It's nice when stock prices are flying high, but when stocks are tanking, my dividends are still flying high and have a favorable outlook. That means I am achieving my primary investment objective. Hope your also achieving your primary investment objective, whatever that is.
Price point of oil affecting LNG demand? Couldn't tell you. World population and standards of living are increasing and energy demand/consumption along with it. You need all kinds of midstream capacity and lots of it to transport all that oil and gas. Hard to say that LNG tanker rates won't at least be higher than they are now with the large amount of export capacity about to go on line after years of construction. Overbuilding of the LNG fleet also not as likely as other sectors.
Of course, Cramer spoke to what I already knew about midstream energy; however, he had some informative comments about the drastic drop in MLPs and how the need for a hedge fund to liquidate of positions trumps stock fundamentals. Remember, a good know-it-all must know that they really don't know it all.
Thanks for the suggestion. I've had CVRR but now have plenty of exposure to refining. I prefer NTI as a variable distribution MLP because of their access to Bakken and Canadian crudes and the market they are in. position, where I happen to live. LYB is also a relatively new favorite would interest me more than CVRR for the long term. It's sold off for no good reason I can see. I also have XOM which is the world's largest refiner, among other things.
NMM has been good to me over the years but I have been mostly out of position for playing these sell offs. I'm thinking this is the time to be more proactive trading one of the few stocks I think I know. Emphasis on "think."
Listen to Cramer's piece on MLPs first. He absolutely nails it. Not the time to sell midstream energy MLPs.
BTW, I bought back some shares of NMM. Waiting for the next time it goes above $11. Goes ex-div August 11, I think.
You could be right that energy will be down again in October. The game is rigged. But, November will be another month of quarter over quarter dividend increase announcements.
I forgot, where are we tomorrow? Maybe Amazon's beat will make people wake up. There are too many good stocks out there at sale prices. Will the maggot shorts really wait until after the weekend to cover?
OK. So where are we? Yesterday and today, TRGP, NGLS, ETE, ETP and CPLP raised their distributions, quarter over quarter. NMM maintains its 16% dividend, as expected. These are not broken companies. Charts broken? May be, but more likely the charts tell us the system is broken. Hope the maggot shorts choke on their own vomitus.
Wells does a weekly update of short interest in an array of shipping stocks and not surprisingly, activity is much higher than it has been in the past. LNG shipping is a sector that will see higher rates as far as the eye can see (2016-2018) yet the shorts continue to feast on shipping like maggots on a dead fish.
Fortunately, GLOP recently completed an acquisition funded by a well-timed equity raise. The three chartered vessels that went on the books July 1 will generate a 7-10% increase in the Q3 distribution payable in Q4. The parent GP (GLOG) has several candidates for future dropdowns so future distribution increases can be expected. As an investor seeking income that's a good deal and a good buy.