Sarge, it's not just Greece but China also. I'm trying to be patient and suggest you do the same. We will see what happens when MLPs report in August. I agree with Ed that the only thing that seems to be working is medical, that's why I liked your Baxter spin off. Going to look at CAH as it's down. Aetna is buying Humana. Maybe that is the sign that insurers are peaking.
Thanks for this info, but before anyone relies on potentially conflicted investment banks to offer their analysis, one must ask if anyone of these masters of the universe got any of this right at any previous time. Snarky comments aside, how does JPM justify a yield of 1.3/16 = 8% on this when the sector is trading at 15%+ yields. I can't see a 8% yield as normalized. More like 12% (even if things get stabilized) and that would equate to a share price between $10-11.
kxviswan, your understanding of the mechanics of the offering are incorrect. Read the prospectus. The underwriters did not buy the shares at $7.97. It clearly states in the prospectus that the underwriters sold the shares at $7.97 and paid the company $7.65 (hope my math is correct, but the underwriters' discount is specified at 0.32 cents). The way an underwritten offering works is that the underwriters go out to institutional investors and find a market (vol and price) that the investors will buy the shares at. Then they get a fee and pass the lower proceeds on to the company. They have almost no risk because they have already placed the shares before agreeing to buy them from the company at the offering price. The investors that bought the offering could have already been short the stock and used the offering to cover their shorts.
Sarge, I noticed the action in MMP. Seemed unusual and overdone, but many of the midstreams are getting hit. EPD and MWE both selling off too. Unfortunately, these declines are not part of a wider market selloff, but are more concentrated in the energy patch, which could mean that they have a way to go. But be careful even if the RSI's get into oversold territory as the charts look terrible.
stagg, re WMC, one would think an spo is coming with the stock over $15. I'll look to buy back after they do the spo, but maybe not right on the open. With luck, it might dip below $14 if they do an spo.
It's not just this but other e&p MLPs and even the big midstreams like EPD and MMP. The whole sector is getting killed with only a few exceptions. However, those thinking that management would say something if something was truly wrong are kidding themselves. These are the same guys who made an SEC filing for ATLS in connection with the TRGP merger that the dividend would be over $1, and then two weeks later after the filing, cut the dividend in half.
Many MLPs are getting killed. It's not only in the e&p space, but some of the big midstream MLPs like EPD, MMP and MWE are selling off. And all those declines are taking MLPL down too. MLPL just broke a triple bottom support level.
One reason why they might not cut the distribution. Management owns a lot of restricted stock units and phantom shares. I bet under the terms of those, they get credit for a distribution on the units. Someone should check whether they own their units/RSUs in a margin account. They probably need the distribution to pay the margin interest.
Walker buying units at $22 in Dec clearly shows he has no clue.
Like the discussion. But I have to add a sour note to your assertion that "the screw up was not their fault. The market put some extraordinary values on their Utica acreage in 2011." The market had no idea what the Utica was worth. It was Management that went around in conference after conference saying that the acreage was worth $15k to 25k per acre. It was Management that couldn't close a $1 billion dollar sale after saying it would close. It was Management that kept saying in presentation after presentation that they were continuing to pursue Utica sales. Meanwhile other companies like GPOR and Aubrey's new company were buying and selling Utica acreage. If the value of the Utica was too uncertain, perhaps they should have just kept quiet about it until a sale actually materialized instead of making it the central focus for close to 3 years. Maybe they should have spent more time thinking about the hedge book. They were lucky that they got the opportunity to invest in Cardinal and UEO. Imagine where the stock would be without those deals.
Saw an item on TK that they are raising their divy 75% to 0.55 quarterly and pledging to increase it 15-20 % per year over the next few years. The new divy would equate to around a 5% yield. Stock has been beaten down and is approaching oversold levels.
Maybe those of you who follow the boats closely can opine.
Let me try this again (my post disappeared). There are apparently two RSI stats. When I use the term RSI, I am using the RSI that appears on charts. Stock charts defines it as:
Developed J. Welles Wilder, the Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. RSI oscillates between zero and 100. Traditionally, and according to Wilder, RSI is considered overbought when above 70 and oversold when below 30
I have also heard of the RSI as you define it above and agree that you want to be buying stronger stocks.
I think this is just an example of two different metrics using the same name (pretty confusing). As for the RSI on charts, you can check yourself whether it is a reliable indicator for that particular stock, but I find whenever a stock gets over 70, it usually pulls back within a few days. Sometimes a stock can get really overbought and get into the 80's, then it almost always pulls back.
On the downside, I don't think the indicator is as useful because stocks seem to get more oversold and produce a lower RSI, more than they become overbought and continue to a higher overbought level. The bounces from an oversold level are sometimes quite short and the oversold level can be revisited within days. Look at EVEP. It's been in oversold territory all of June and still hasn't bounced up yet.
William, be careful. RSI back up to 26. I've seen this before where a stock can have a single digit RSI then bounce temporarily and then resume a decline. The problem with ARP is their debt is way too high and they will have to cut the distribution next year. They also recently hedged oil in the 60's. They still have to issue more 10% preferreds to pay for one of their acquisitions that they did last year. It's a mess and the Cohen's are a joke.
A couple of ideas from this week's Barrons. First, for those fans of BAC, it has a warrant that expires a few years out for which the exercise price declines if BAC raises their dividend. Second, an article on preferreds notes that some closed end funds are trading at significant discounts (JPS was mentioned). And finally, Gannett is breaking into 2 units, one for newspapers and one for TV stations. Full disclosure, my friend's aunt is the CEO.
I am giving you a compliment, but I also have noticed from your posts that you seem a bit impatient in following various poster's or others recommendations without waiting a bit. There are so many mistakes one can make investing, but eliminating the error of chasing something that is overbought has to be one of the most critical errors to stop.
Bear, I think you mean dividend yield rather than profits. Gracie will tell you that the 18% yield is due to their portfolio of IOs and inverse IOs. I think I read that article that you refer to. You would think that IOs and inverse IOs are natural hedges that offset each other, but Gracie can educate us about them.
Sarrge, I hope you didn't chase FB just because Cramer said it was going to $100. Cramer has a history of top-ticking many stocks. With any media mention of any stock, whether it is Cramer, Barrons or any brokerage firm or talking head, it is always a good thing to wait until the near-term demand that comes from a positive mention subsides. There are probably computer programs that push a stock up based on how many times it is mentioned.
You could be right about FB making a run at $100 but first it has to hold this new level. I saw the same thing happen recently with LLY which got a boost on a patent victory and a positive mention. The stock popped to $86 and then came back to $82 and now is going back up.
I have to hand it to you though. You have mentioned many stocks that have had some great returns. I don't know at what price you may have bought them, but many have had great looking charts. I've chided you before for pumping them when they are at overbought levels and from some of your posts, it seems that the losers in your portfolio occur when you chase someone else#$%$.
Some of these articles really don't know what they are talking about, but they just write about Kinder because that's the most recognized name that they know. There was an article from one of the brokerage firms about who could do an accretive acquisition of WMB and I think only ETE could do it.
I don't think WMB is really going to put itself into play and ETE probably does not come back to them, so the question is who is next. At $58, MWE has got to be high on the list, and also GEL.
On a slightly different note, MHR said they are going to try to sell their Eureka pipeline inthe Marcellus.
Kbon, just speculating, but if ETE were to succeed in buying WMB, then I think they might consider merging WPZ into ETP at a later date, like they did with RGP. Sort of depends on what the synergies would be and the savings, if any, in financing costs. I believe with RGP they were able to lower the overall borrowing cost by merging it into ETP. ETP has been weak recently is now approaching support levels from last year. I was considering buying, but I already have ETE and the thought of adding ETP's k-1 to ETE's already complex K-1 makes me shudder. Plus I recently added some more NRZ and your GLOP on their spos. And now MWE is back on my list after their recent decline. Then I have to save room to average down in HTGC if it ever shows signs of bouncing and would like to consider adding SFL at some point.