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Inergy, L.P. Message Board

marklibera 407 posts  |  Last Activity: Oct 30, 2014 10:39 PM Member since: Aug 14, 2007
  • Reply to

    For Ambulance Chasers

    by yors2use Oct 23, 2014 12:44 PM
    marklibera marklibera Oct 24, 2014 2:15 PM Flag

    yors, it took me working at a publicly traded company (in the mortgage REIT sector) to understand that accounting does not equal market value. All companies establish their own accounting policies and there can be differences in the way 2 companies determine the value of their tangible assets. Book value of assets does not equal earning value. Since APL has new plants in the Permian, maybe they have a higher book value on these reflecting more recent historical cost and they have not incurred as much depreciation (i.e. higher book value), but NGLS earns as much on their older, more depreciated, assets.

    For example, your newer Porsche may cost more than my older one, but I may still be able to beat you in a race. We care about the race (earnings), not about how much you paid for your car (value of assets).

  • Reply to

    For Ambulance Chasers

    by yors2use Oct 23, 2014 12:44 PM
    marklibera marklibera Oct 24, 2014 2:02 PM Flag

    Closing is not until next year. If you sell prior to the close of the deal, then for sure you are going to trigger a sale and possible recapture at ordinary rates. If you hold and participate in the deal, then it depends. The last MLP to MLP merger that I participated in between CMLP and NRGY did not result in a taxable event and the boot (i.e. the cash) was treated as return of capital. And my suspended losses carried over to the combined entity. The proxy will discuss the tax ramifications.

  • marklibera marklibera Oct 24, 2014 1:57 PM Flag

    I believe there was a reverse stock split so that's why the stock had a much higher price.
    As for earnings and payout, don't be fooled by accounting. mREITs have to pay out 90% of taxable earnings. GAAP earnings are just an accounting tool. Look to see how much cash is coming in and how much is going out in dividends. NYMT benefits from liquidity and the risk-on play, as many of their investments are in the very leveraged subordinated tranches of CMBS (you know, the things that blew up last crisis).
    Ultimately, a bet on NYMT is a bet on the Fed and more QE.

  • Reply to

    Just Back and catching up with the board.

    by rbgambler99 Oct 24, 2014 11:43 AM
    marklibera marklibera Oct 24, 2014 1:49 PM Flag

    Gambler, here are my thoughts. The market bounced because of comments by the Fed members about QE4. The other day, the ECB leaked that they would buy corp bonds (then it was denied) and today Draghi is arguing for stimulus, this just as it was disclosed that numerous European banks will flunk their stress tests. The market bounces each time we get these verbial pumps, but the market really needs more QE (the earnings really aren't there as the misses in Coke, IBM, Amazon show, although some had good earnings like Apple). There are at least 2 more POMO days left in October, so I expect the market to continue up, but after that, no one really knows. All we have is past history and that shows plunges whenever QE ends. We keep wanting to believe in fundamentals because we can't admit that it is mostly due to the Fed.
    On the oil and gas stocks, what the market is missing is that most of these are hedged and that should come out in the earnings calls. But the e&p MLPs already had nice bounces. The interesting issue is with the Saudis as they have now switched their position on supply, now cutting supply to offset the price decline. While the price of oil may still decline a bit, last week's capitulation may have taken out all of the weak hands who were forced to sell o & g stocks.
    If the economy is slowing, then banks and BDCs will not bounce. They may have had their time this past year when everyone shifted out of mREITs because of a hope that the economy was reaching escape volume. They may also be tax-loss selling candidates as well as anything that is down for the year.
    The intangibles are the weather and the election. The battle is between whether the Fed can talk up the market with the Yellen put, or whether the market forces the Fed's hand with some kind of plunge.

  • Reply to

    OT: question for huff on spreads

    by marklibera Oct 24, 2014 10:09 AM
    marklibera marklibera Oct 24, 2014 1:30 PM Flag

    Turbo, let me re-read your post and mull it over. To recap, Yhoo is starting to move up -- partly because of the better earnings report and partly because the value of BABA and their remaining holdings are linked. I have Nov $43 calls expiring 11/22, so there is still 4 weeks left. My calls are still underwater but the whole position is near breakeven (but as you say, that confuses the analysis because I should just think of the open long call position). There is about $1.40 of premium in these calls (they are trading for $1.75 with the stock at 43.32. So as I see it, it is a race between stock price increase and premium decay (1.40 divided by 28 days left to expiration = 5 cent of decay each day; can one say that as long as the stock is increasing by 5 cents per day, I should continue to hold?).
    Many think Yahoo is worth over $50, but the catalyst is the plan for returning their cash, which won't be disclosed until Jan. The other catalyst is potential gain in BABA when they report in early Nov.

  • Reply to

    Caution on refis

    by jackhilr Oct 22, 2014 1:54 PM
    marklibera marklibera Oct 24, 2014 10:44 AM Flag

    Jack, thought you would at least wait for the earnings call before getting out. The good numbers should propel the stock upward. If the GAAP numbers are not that good or if the stock doesn't respond, then I could see taking your profits and waiting for a better entry point. And we still also have the potential for a special divy announcement in Dec.
    I am not sure what level you expect long bonds to pull back to. Looks like we already filled the gap to 2.3%. Maybe 2.35 - 2.4% is the top of the range.
    As for WMC, I think they would sell MBS if rates plunge and redeploy into cheaper CMBS or non agencies. As long as we don't go into a recession, I think they can manage the portfolio and find the best value.

  • Huff, I entered a Nov 43/48 call spread on Yahoo and then took a profit on the 48 calls that I sold (hoping that a deal would be announced that would propel the price over 48). My question to you is what do you do with a position that doesn't seem to be working out -- do you just take it off or do you roll it out at an added cost?
    Because YHOO likely won't announce a plan to distribute its cash from the BABA sale until Jan, the stock price might peak in the mid 40's as Nov expiration approaches. My 43 calls might not increase much more and there's some 30 cents of premium that will evaporate. I could put the spread back on for February (buy the 43 and sell the 48 or even adjust these prices up, but I will have to contribute additional capital. Suggestions?

  • Reply to

    For Ambulance Chasers

    by yors2use Oct 23, 2014 12:44 PM
    marklibera marklibera Oct 24, 2014 9:58 AM Flag

    yors, not sure of the relevance of tangible book value comparisons in evaluating a merger. You might consult some posters (like Factoids on seeking alpha) who have analyzed the valuation of different MLPs or read some research from a shop like Wells. I looked at a recent Wells report and saw that APL had a higher valuation multiple on a price to DCF growth than NGLS. Translation: NGLS is a better valuation for the amount of growth it has versus APL. And again, you should wait to see the proxy to make a conclusion about the taxability of the $1.26 in cash. As with the CMLP/NRGY merger, it may be considered return of capital and be non-taxable.
    BTW, NGLS just raised their distribution 9% over last year. And you forgot to mention that as part of the merger, TRGP has agreed to the same type of IDR giveback (may even be greater) that APL had with ATLS.

  • Reply to

    Back to $15.00 by November 1st.

    by fukyoushorts062425 Oct 20, 2014 12:55 PM
    marklibera marklibera Oct 24, 2014 9:28 AM Flag

    wdtcf,
    Forget payout ratios and current ratios when analyzing mREITs. These are not like operating companies who need to reinvest their cashflow into their operations. The price to book is important, but your comment is off. mREITs can trade up to 1.25 times book before becoming overvalued. The key to mREITs (besides price to book) is the spread that they earn and their leverage since that determines the distribution. The market is doubting WMC's ability to maintain a dividend in the 20% range (most others are paying 13%), but that dividend is not the result of excess leverage (I think they are still in the 6-7 range). Another important factor is getting the hedging right.
    No doubt mREITS can be risky if everyone bails out when the first sign of an interest rate rise (on short or long rates) occurs. We saw that last year when the taper tantrum hit. But there's considerable doubt as to when rates are going to rise as the economy does not seem to have enought escape velocity to warrant a rise in interest rates (long or short).

  • Reply to

    OT: MLP distribution increases

    by marklibera Oct 21, 2014 5:28 PM
    marklibera marklibera Oct 24, 2014 9:16 AM Flag

    Ed, I am still holding on to EVEP. There's a poster, rbb, who seems to have an insight into what is going on in the oil window of the Utica. Would be nice if they sold some wet gas acreage one of these days.

  • Reply to

    MWE raises

    by bobdbeck Oct 22, 2014 5:14 PM
    marklibera marklibera Oct 24, 2014 9:12 AM Flag

    Kee, not sure why you think MWE is overpriced. They have no IDRs and they are still trading with a 5% yield. Comparable MLPs are trading with lower yields. Many MWE holders have been disappointed with their distribution growth, but they have had to finance several projects in the Utica/Marcellus (I think the count was 19). I think they are investment grade.
    There are 2 MLPs I wished I had bought earlier -- MWE and MMP. Both got rid of their IDRs. Both had smaller yields than other MLPs, but that was before I understood the great importance of growth over absolute yield.

  • marklibera marklibera Oct 23, 2014 3:47 PM Flag

    Jack, ACA is going to get knocked out by the Supreme Court. Congress botched the language on the subsidies for the state exchanges. After bending over backwards to view it as a tax, this time the Roberts Court (or the 5 who want to strike it down) is going to get it right.

  • marklibera marklibera Oct 23, 2014 2:10 PM Flag

    Jack, that depends on how low rates have to go to entice refi's. Almost anybody who could refi probably did during the lows a few years back. My last mortgage was at 3.5% back in 2012. The problem if the economy gets too bad is with CMBS.

  • Reply to

    Does Antero Have Cashflow Problems?

    by sonny27696 Oct 13, 2014 10:20 AM
    marklibera marklibera Oct 23, 2014 1:24 PM Flag

    What a dufus! Did you cover your short? They mostly sell nat gas and NGLS. Ever hear of hedges?

  • Reply to

    MWE raises

    by bobdbeck Oct 22, 2014 5:14 PM
    marklibera marklibera Oct 23, 2014 11:38 AM Flag

    No, I think they are content in their space.

  • Reply to

    MWE raises

    by bobdbeck Oct 22, 2014 5:14 PM
    marklibera marklibera Oct 23, 2014 10:26 AM Flag

    Bud, not sure I agree. They raised guidance and reported they have more volumes. I do believe that someone will want to acquire them, but it will take a pretty penny -- over $100 and maybe even more. Since ETE lost out on TRGP and NGLS, maybe they might come calling.

  • Reply to

    IRM pays a 45% annual dividend

    by fukyoushorts062425 Oct 22, 2014 12:50 AM
    marklibera marklibera Oct 23, 2014 9:57 AM Flag

    yes.

  • marklibera by marklibera Oct 23, 2014 9:11 AM Flag

    Many of you who read the i.v. board for MLPs have heard of a poster named Factoids who also posts his analysis on seeking alpha. He has two new articles out on consumer staples and MLPs and also covers BDCs. In a nutshell, for dividend investors, he analyzes a company's CAGR, required rate of return, distribution, bond ratings and accuracy of EPS predictions to make whittle down income picks. I've read his commentary on MLPs, but not so much on the consumer staples and BDCs. He mentioned he had warned against Coke and a BDC symbol FULL, which both sold off recently.

  • Reply to

    o/t TWX time warner

    by madmax19471952 Oct 22, 2014 10:10 AM
    marklibera marklibera Oct 22, 2014 5:41 PM Flag

    Sarge, take a look at Iron Mountain (IRM). The stock may have just broken out. Give it a day to see if it holds. They are yielding close to 6% when other equity REITs are in the 3-4% range. The stock did not fall during last week's plunge and held above its 50 dma. The REIT indices will have to buy it when they rebalance (in Nov). I think it goes to $50. I bought it before they announced the special divy and the new higher rate.

  • marklibera by marklibera Oct 22, 2014 3:49 PM Flag

    Let's hope this isn't a sign that the downtrend is returning. We aren't out of October yet. I keep saying this without every acting on it, but now may be the time to buy some insurance.

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