"read some platts and bentek and then let us know what they see"
Platts and Bentek are both in agreement with the EIA of production capacity outstripping demand as far as the eye can see.
It's not negativity, simply common sense that at this price and especially at $5, producers will be locking in hedges like crazy and that will allow them to produce even more next year with positive cash flow.
But it's not Friday 13th, so that makes you still wrong.
"Friday the 13th this stock drops like a rock.
There are still people who don't understand the ex-div date."
At $5, producers will be hedging like mad and drilling for all they are worth in 2014.
A month or two of high prices now almost guarantees a longer period of relatively lower prices since producers will be able to get hedges allowing them to over-produce for longer.
If prices spike up to $5 due to cold weather, every producer will be locking in as many hedges as they can and will be producing flat out in 2014, leading to prices back in the $3s.
This is a case where high prices for a short time will lead to low prices for a long time.
The producers will be able to continue oer-producing for much longer if they lock in hedges now.
Your 'facts' are completely wrong but we all know you are not interested in the truth.
That's why many of us invest in high yield income securities like MLPs and not in growth stocks.
These MLPs are paying me $300k per year in CASH.
That cash will be handy if and when we get a crash.
P.S. Oil could go to $50 in a replay of 2008 but it will never stay there long because that is below the cost of production for a huge amount of global supply. You'd see a replay of 2009 where the price bounced right back in a matter of months.
It doesn't need any justification from me.
I simply report the news, I don't set the price.
It's a seasonal (winter) effect).
Once we get close to spring NG will be back where it was, probably high $3s, low $4s.
EIA predicts rising NG production all the way through 2040 with effectively no limits.
What seemed unthinkable not long ago (a breakup of the Eurozone) is now gaining a lot of support even from the original architects and supporters of the Euro. If Germany doesn't relent on its hardline austerity stance and allow some inflation, there is definite possibility of either complete Euro breakup, a split into northern Euro and Southern Euro, or withdrawal of Germany from the Euro.
In any of those scenarios. the value of which ever currency Germany end up in (either back to marks or a Northern Euro) would rise significantly. That would increase the value of NRT distributions when converted to US $ and presumably the unit price would rise to reflect that. So here we have NRT as a play on breakup of the Europe.
On the other hand if the Fed taper results in a rise in US interest rates that would tend to raise the value of the US $, which would be negative for NRT unitholders. However as part of the taper announcement, the Fed emphasized that interest rates would remain low even longer than previous guidance.
To put it more succinctly:
At the current price, I don't think it likely for you to lose significant money.
More likely you can make a little.
But I'm not convinced of the prospects for large total return (combination of distributions plus price change). More likely the total return will be positive but modest, despite the high current yield.
Which means it is probably OK to include as a part of your income portfolio but not appropriate to go very overweight on it. That's what I have done - I have added a position around this price range but slightly on the lower end of my usual position sizes, and if the price does drop further I may add a little more but not back up any trucks.
If oil prices drop, likely the price of this will drop also.
" the value of this trust as a dividend play?
Or, is this more of a long term investment?"
By definition it is a 'dividend play'. You do not buy it for capital appreciation.
As to the value, I do own a position but am unsure of the prospects.
It seems like a decent buy at the current price, however there was a negative article with estimate of future distribution - google the title to read it:
"Enduro Royalty Trust: A Forecast Of Future Distributions"
These kind of articles include plenty of assumptions but still worth taking into consideration. The question hinges around how much will NDRO pay out long term versus the price you pay for it today. To make it worth the risk, you probably want a 6-10% annual return (see the article's table with different NPV %s).
So, I don't have a definitive opinion, however I will say that it's a better prospect than those limited life trusts like SDR, SDT, CHKR.
My favorite of the traditional trusts (like NDRO) have been CRT and PBT.
"whichever comes first."
check again - it is whichever comes LATER.
Which could be a big advantage except that I doubt it will be because they will slow down production in order for the two conditions to occur at roughly the same time. Otherwise it would be like them giving money away.
he has never invested in any of these vehicles either long or short.
Apparently it's just the way he gets his kicks by writing ridiculous statements every day on dozens of mlp and trust boards. He has no understanding of them at all and no financial interest. All he seems to have is lots of time on his hands.
nobody forced you to buy anything. you chose to put money in a risky investment.. The prospectus has pages and pages of risk factors.
If it paid its dividends for 20 years that means the underlying securities paid their dividends. So that doesn't explain why you wouldn't just buy the underlying securities and so get the same track record but pay less for it (not to mention not paying the salaries of the fund managers).