Vanguard Natural Resources, LLC Message Board

Another cost factor--liquid travels at about 2mph in a pipeline, I believe. Plus, the liquid in the pipe is in effect part of your permanent investment, which adds a little more cost.

Imagine! 1.5X coverage and cheaper debt! Sigh....

Listened to yesterday's analyst presentation--Stice didn't seem too disappointed, even after being allowed to amend his bid. Their plate seems pretty full as it is.

This time around, they seem to have enough cash and financing to cover their 2013 cap-ex without issuing more shares. But I thought that was true this time last year, and I was wrong. What do you experts think? (And i do mean experts--this is the best board on Yahoo.)

Zacks is only valuable if you do the opposite of what they recommend.

Zacks is the kiss of death.

I should have mentioned Lutnick was asked if BGCP would pay off their debt. He would not say, but pointed out the $484M (in NDAQ stock, not cash) would be received pro rata, which would offset their debt service. I looked at their 10Q, and he's correct.

He also said there would be more info coming as the deal nears completion. I expect a drumbeat of news items and pressers over the next couple of months.

So we agree it is an Enron-stlye ESOT.

Tell that to all the employees in the ESOT. They sen to think that is THEIR cash. Or is this an Enron-style ESOT?

Thanks for the question! I can identify a couple dozen. I own several--AGNC, AMTG, BGCP, NLY, CMLP, EHI--with current yields around 10%. You can mix and match a couple of these to average a 10% yield.

You may object that several of these are mREITS--highly leveraged, but do you know FGP is much more highly leveraged? According to their most recent 10Q, FGP has $1.5B in assets and $1.5B in liabilities, with basically no stockholders' equity. BTW, $400M of those assets are goodwill or intangibles, assets that only have value if the business is profitable.

If you want less leverage at a high return along with more safety, look at CEF's. Morningstar lists two dozen or more yielding 10%-plus. I'm about to buy some GAB, a large blend fund which yields 8.64% and is highly rated by Morningstar. I give up a little yield but that is more than made up by the risk reduction; you'll understand if you look up the stocks in GAB. Yes, they boost yield by employing about 20% leverage, but that's nothing compared with the leverage you're taking on with FGP.

If you insist on sticking with an industry in decline, one that is a "price taker"--i.e., propane--switch to SPH or APU. Both are digesting major acquisitions and both are likely to do better with their acquisitions than FGP, based on their past history with similar deals. And both are much more likely to increase distributions than FGP, which I believe is one mis-step away from cutting or suspending their distribution.

Sentiment: Strong Sell

How about a cite for that S & P report? I've checked several sources, can't find any record of the report--are you sure they weren't rating the debt?

I did find a Zacks (!) upgrade this March 7, but they've downgraded it since.

"Duh! 18 years of dividends, lets scratch our heads?"

Yes, and wonder why there's never been an increase. Mr. Barbecue is said to be "immediately accretive". Do you really believe that, after all these years of acquisitions that haven't produced a penny?

I am an accountant, 46 years as a CPA, and I've owned a variety of propane and midstream MLPs. I would not touch FGP with a ten foot pole. There are many lower-risk ways to get that 10% you all coo over.

Sentiment: Strong Sell

Thanks b&w--that is news I can use!