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Валгрин Ко. Message Board

lc736 4 posts  |  Last Activity: Jan 19, 2016 1:57 PM Member since: Jan 9, 2001
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  • Reply to

    Did CRAMER Say to BUY yet?

    by buy_chinadotcom Jan 19, 2016 12:42 PM
    lc736 lc736 Jan 19, 2016 1:57 PM Flag

    He STILL has a BUY recommendation on it. When it hits $5 he'll change it to a SELL recommendation.

  • Reply to

    Does this have a floor?

    by toscrawford Dec 11, 2015 9:56 AM
    lc736 lc736 Jan 12, 2016 2:20 PM Flag

    We're finding out right now that they are not very different at all. The dividend cut will be coming very soon. They other options are 1). selling the assets which nobody will anything for right now or 2). it'll be bankruptcy.

    The smart money is betting this baby goes down.

  • Reply to

    stopped out at $36.

    by timeforacrash Jan 8, 2016 9:57 AM
    lc736 lc736 Jan 8, 2016 11:09 AM Flag

    Don't do that. There's a buyout offer at $70+ just around the corner and oil going to $100/barrel real soon.
    You're just on the wrong side of the table. You should've been betting on APA going down.

  • Reply to

    Does this have a floor?

    by toscrawford Dec 11, 2015 9:56 AM
    lc736 lc736 Dec 11, 2015 12:28 PM Flag

    The answer is zero and I'll tell why.

    First look at the dividend. KMI (another pipeline company in a similar financial position)) lowered their dividend by 75% a few days ago. They have a pile of debt and a payout ratio of 350%. That means their dividend payments were 3 1/2 times more than their cash flow. The only to make the dividend payments is to borrow more money. Rating agency threaten to lower their credit rating which would have resulted in higher payments on their debt. KMI was stuck with basically selling assets or reducing their dividend. They reduced their dividend.

    Now the bad news. ETP's payout ratio is 750%. A whole worse than KMI's. ETP will have to reduce their dividend very soon and it'll be more like by 80-90% or outright suspension.

    Even without the dividend payment they are moving closer to not having enough cash flow to make the interest payments on their debt. If that happens ETP could go to zero or likely bought by some VC for pennies. BTW, interests rates may up next week which adds more pressure.

    Denial of the facts will only get you ina deeper hole.

WAG
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