search news could not find reason for drop. UAN prices are steady. No news on plant outages, in sugar land paper, probably something will turn up after hours.
Could be, volume high for that, there is no news. Corn prices are going down, and that will affect UAN ,but other companies in space are down marginally. Maybe a fund unloaded a position. Will probably know tomorrow
I own both hgt and SJT as investments in the last year. I feel that that Natrual gas prices in the next 2-3 years will closer to $5-$6 than the current 3.80. With the US exporting natural gas its will put upward pressure on the gas price along with continual conversion of trucks and buses to natural gas. At $5 gas SJt prce will be closer to 25 with clost to a $2.00+ payout per year.
In a recent interview on financial sense the agricultural expert expexts there will be slightly less corn planted this year than last. i hope I have my zeros right but I believe he stated that he felt that 93 million acres will be planted this year, as opposed to 99 milion last year. He said still a lot of acreage. He felt that China would be importing fertilzier instead of selling. He felt that the current stock prices in the ag sector are at the low point. He likes AGCo, Derre, And AGU I believe.
PWE’s strategy if you analyze it makes sense. It makes sense to sell off the not core JV and pay down debt The problem is as an investor you will not realize any gains until 2015-2016 when they are in the Cardium full bore and production starts to grow..A lot can happen between now and 2015, I do not feel the dividend will get cut, they will have enough cash flow from operations and sales to cover the dividend and to pay own a large portion of the debt as indicated on the slides. As the Calgary paper noted PWE investors are getting tired of the continuing restructuring, and that is the reason for the drop, people just don’t want to wait until 2015
listen to the conference call. Overall it was positive. Take aways:
1. raised the bottom level of the total year distibution by 5 cents to $1.85
2. Production in the quarter was higher than last year in psite of the one week putage because of the increase capacity. Overall cpacity levels for the quarter were about 91%.
3. Next year with full one year of increase production from the addition production will 20-30 % higher than this year that had only 10 months of the new facility. .
4. UAN price should be supportive next year. Anticpate lower imports , but that will offest by lower corn production he still anticipates 90 million+ in corn acreage
5. looking an new additonal ammonia facility for 2017, under evalaution.
6. Balance sheet is good only 125 million in debt and 90 million in cash.
7. My takeaway: next year distribution should be in line with this years, may be higher if UAN price holds up because of the increase production levels.
The only problem with the stock that is a large percentage of retail investors, and stock like this are more volitale as retail investos will trend follow rumors and hearsay for than instutional. The stock has been in a downward trend scaring some retail investors. In reality the stock at this price is being setup for takeover. As MF pointe out they have one plant and company like Terra that is 3 time the market cap and in the same situation could expand their base and diversity by buying UAN.
Bullsh-- statement. The plant was turn over a book value from CVI as part of the sspin off. I have not check the books, but if 400 million was the depreciated value it does not represent the replacement costs for these assets. To value a company you generally look at cash flow not book value because of the accounting depreciation factors and replacment value of the assets which are not generally represented by book value. Most good companies sell for may times book value because of this.
Listen to the Barclay's webcast. The new CEO really knows what he is doing, He righting this ship, and we will see possitive relsuts with each earning statement. Costs have been reduced by 100 million per year and at current cash flows the dividend is sustainable (wil probable see free cash flow in some quarters.
As I posted on seeking alpha, the issue of underspending on pipeline maintenance is a red hearing. I work for a public utlities commission. and the only way these entities (KMI/KMP pipelines are FERC regulated) can make a profit is through CAPEX spending. They are allowed a regulated rate of return of about 13% (varies with utility) on any CAPEX investment. Mainenance costs are a past through, and that can't earn anything on these expenses. So what does this mean, they CAPEX any cost they can (some expense in non regulated industries are capitilized in regulated industies) and they are incentivies to make investments and discard old investments. KMI understand this very well and plays the game very well. I laughed when I read that.