They really need to answer the question re: will anything of value be left when Phillips and Spectra get through with the "fixes". The unit pricing is acting like DPM is headed for bankruptcy.
Glad you don't work for the company. Why don't you suggest that they just file bankruptcy, or become a C corp and stop paying dividends forever? Do you really own any of this MLP and why did you buy it if distribution was of no value to you?
"UBS downgrades DCP Midstream Partners (DPM) from Neutral to Sell on NGL weakness. "We are lowering our DDM-derived PT to $31 from $41 to reflect the impact of our reduced dist growth reflecting our concerns. We believe the resolution of DCP LLC would be a catalyst for us to review our stance. We expect weakness in propane/butane to continue in the near term before staging a recovery in 4Q and thus will continue to pressure the credit profile of DPM.""
At least we know what appeared to be insider selling was actually UBS clients acting on the downgrade before the publication, which UBS is famous for (tier of clients--big ones get the news first, and on down the line). NGLs have been hit hard, but DPM is hedged for 2015 and has added hedges recently when prices had their short-term rise. They are far more than just a propane/butane company. In addition, both Phillips and Spectra have forgone distributions through 2017 which should protect the small investor's distribution. DPM has stated in their earnings reports of late that distributions would remain flat through 2015, so no big news there. If DPM does hit $31 or under, it will be time to borrow on anything you have and load up.
The retail price of diesel in Washington State was about $.20-.30 more per gallon than premium gasoline for about the last six years until the last few months, and is now about $.30-.40/gallon less. Not sure what that spread hit is doing to CMTL diesel refineries.
One or both is treating the MLP like it is in their interest to see the price in a downdraft. A buyout may be coming soon and it is looking like it will not be pretty for the small "partners".
Go thru the recent postings and hopefully you will understand. e.g., "Too quiet here with DCP LLC/DPM indicating there is going to be a resolution by mid year to resolve debt/ratings issue" in April by moneyeconomics
We still need to see what Phillips and Spectra are going to do with this. They said a decision was to be made by mid year, which is now, and when a stock is making multi-year lows, you always have to worry if those dumping shares (units) know more than you do.
Why would you follow and comment on a company you think is a dud--and not even a good short with the distributions you would have to cover. Do you run out of things to do while using your tablet spending the day in the homeless section at Starbucks?
LINE, LRE, ARP, etc
Did the comments at the start of the conf. call where the long-time upper management that left the company were thanked for all they had done have any bearing on this belief?
Listening to Spectra and Phillips earnings calls, and now DPM's, and being told that we probably won't know what will happen to DPM until Oct (or later given their current performance), you have no idea what you are buying when you purchase DPM. DPM took their guidance from bragging about historical increases in distributions to hoping they maintain distributions at the current level. They need help from their owners (SE and PSX) during this time of poor product pricing and it is obvious that is not going to happen. Dropdowns are now going to the MLPs imbedded in SE and PSX. DPM's ability to manage around this commodity price environment is severely constrained by their owners lacking any clarity about what they will do. We have seen MLPs being restructured for the benefit of major owners to the detriment of small "partners" during this tough time and there is little reason to not expect that to happen here. I am trapped in a fairly large position that will result in a major tax hit if I sell and deferred taxes come home to roost. Not a good feeling re: what was a nice holding until recently.
Nothing was discussed re: MRD's huge dump of MEMP units. I would have thought that was a major event in the last quarter. It doesn't give comfort as it probably would have been addressed if the sale did not reflect negative reasons.
from Phillips conf call, CEO responding to Q re: what they are going to do with DPM:
"What I would say is that I think both Spectra Energy and ourselves are in agreement on the path forward and that we're executing that. And we don't want to get out in front of the activities that are ongoing. So I would just say we're in process. We're not at the beginning but we're also not at the end of that process. So we're working through it."
Any ideas what this gibberish means?
Without understanding any good reason for the huge dumping of shares by MRDH, it appears the MEMP price is suffering the consequences and may continue until the issue is understood (assuming it is not significantly negative).