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Inergy, L.P. Message Board

marklibera 528 posts  |  Last Activity: Jan 24, 2015 2:04 PM Member since: Aug 14, 2007
  • Reply to

    FRO IS RED HOT...!

    by staggman99 Jan 6, 2015 10:07 AM
    marklibera marklibera Jan 6, 2015 11:43 AM Flag

    Gartman has been demonstrated to be wrong so often that he is a contrary indicator.

  • marklibera by marklibera Jan 6, 2015 11:42 AM Flag

    Bill Gross often talks his book and since he sells bonds, his outlooks always seem to favor bonds. But his outlook is out and the heading is "good times are over and the time for risk taking has passed."

    The reason for his outlook is that while zero interest rates lead to higher bond prices and higher p/e ratios, that effect on real growth diminishes and eventually reverses. As yields move closer to zero, credit behaves like cash and loses its multiplicative power of monetary expansion. He favors Treasuries, high quality corporate bonds and equities of lightly levered corporations with attractive dividends and diversified revenues, both operationally and geographically.

    On another note, there's a report that hedge funds are most long the S&P since 2013 and most short the 10 yr since 2010. If they are wrong, that's a whole lot of short covering.

  • I don't mention EPD much, but they just announced an increase to their distribution. Seems earlier than normal, but I think some of these midstream and pipeline companies want to show that their business is still performing well, unlike their upstream brethren.

  • Reply to

    Oil down again

    by marklibera Jan 5, 2015 12:08 PM
    marklibera marklibera Jan 5, 2015 5:10 PM Flag

    Tailgrass (TEP) a pipeline stock, announced an increase to their distribution. Stock was still down. Don't own it, but was looking at it back in the summer when I was looking for things that projected increases. Not considering it, but just mentioning that there is hope for the pipelines and midstreams.

  • Reply to

    ARP distribution scenario

    by bosox_pats Jan 5, 2015 7:07 AM
    marklibera marklibera Jan 5, 2015 3:25 PM Flag

    If it is an MLP, then by definition it has a GP. I think what you meant to say is that no decent e&p has IDRs, but several do (EVEP). As bad as the Cohen's are, I don't think you can argue that BBEP and LINE are that much better considering their drops and debt levels. No one saw this oil decline coming, but BBEP had incredibly bad timing buying QRE and then increasing the dividend, only to slash it two months after the deal closed. The spinco will not be worthless, but it remains to be seen how it will be valued after the merger and if it even can be listed with a price less than $5.

  • Reply to

    market sell off yes

    by madmax19471952 Jan 5, 2015 11:36 AM
    marklibera marklibera Jan 5, 2015 2:50 PM Flag

    Oil, but also Ford and CAT getting hit. Story on Yahoo says that the bottom for oil could be $33. Great for road trips but not good for many stocks. I think the 10 yr is going to go under 2% as Jeff Gundlach predicted. Munis are holding up well.

  • marklibera by marklibera Jan 5, 2015 12:08 PM Flag

    Well so much for the divy cuts at Line and BBEP and for oil stabilizing. Talk about a head fake. Citi is out saying more e&p MLPs will cut and they weren't too confident that Line's cut will be its last one.

    When oil started to decline, I found a 3x leverage fund DWTI to buy and lucked into a 25% spike up in one day and promptly sold it in the mid $60's. DWTI is now $140. Coulda, shoulda, woulda.

  • Reply to

    ARP distribution scenario

    by bosox_pats Jan 5, 2015 7:07 AM
    marklibera marklibera Jan 5, 2015 10:09 AM Flag

    bosox, did you forget to include the 2% GP interest share or did you just include that in the amount from their LP interests? ATLS gets 3 different streams from ARP: the 2% GP share, the distribution on their LP Units and the IDR amount.

  • Reply to

    OT: The year in review

    by marklibera Dec 30, 2014 12:17 AM
    marklibera marklibera Jan 4, 2015 9:16 PM Flag

    Well here's some criticism for your advice. First, the law of large numbers states that companies can't always remain in the rapidly growing stage. When their growth transforms from rapid to just plain good, they usually return money to shareholders and grow that amount over time. Most of today's large established and still growing companies, started out small. Second, as Bill Gross has stated, most of the return from investing in stocks comes from dividends. Stocks with growing income can pay growing dividends which presents a better return than bonds (whose interest is fixed). Dividends are also taxed at lower rates than interest and stocks often provide a hedge against inflation. While we discuss dividend stocks on this particular board, that doesn't mean that those are the only types of stocks that I invest in. However, I have found that judging when a rapidly growing stock's growth will slow can be difficult to discern or how the market will react to the normal slowing of such growth. You pay up for rapid growth with high p/e ratios which have less margin for error and momentum traders that can wreak havoc.
    Now investing in high yield stocks can be equally as challenging because they also don't have much room for error if their business slumps which then forces dividend cuts a la SDRL, so one has to be careful. There a lots of different ways to skin the cat.

  • Reply to

    Hello MB

    by madmax19471952 Jan 2, 2015 8:29 AM
    marklibera marklibera Jan 4, 2015 11:10 AM Flag

    Kee, but are the refiners the ones that benefit or the fractionators like EPD, MWE and TRGP (with NGLS) and the ones with condensate splitters like PAA and MMP.

  • Reply to

    BBEP cut after market close

    by artist_formerly_known_as_pooch Jan 2, 2015 7:17 PM
    marklibera marklibera Jan 4, 2015 11:03 AM Flag

    rbb, I'm between you and pooch. Having been here for several years, my experience mirrors Pooch's and so I am in a "show me state of mind." Maybe Pooch and I are the only ones left and all the others have moved on having been replaced with investors like you who can be in a position to see the opportunity and the patience that those of us with some shares significantly north of $50 can't.

    I do believe that UEO gets sold and there will be buyers, although maybe not at the top prices. But the risk again is that Walker tries for 14 times EBITDA instead of 10 or whatever the market is, and we add UEO to the list of asset sales that didn't get done. I find it sad that they could talk about further Eagle Ford and Mancos sales at the Wells conference when oil was already in free fall. At this point, they are too much talk and not enough action.

    Line and BBEP have given the sector a gift by cutting their distributions and I think they will follow, but maybe not as much, if only to be seen as not being more risky than the rest. Pooch is right that the market is not paying up for the distribution. If they actually used the saved money for something good, the market could respond well, but again, if it is more promises of we will invest in a good opportunity later, the market will yawn. If they have any traded debt that they could buy at a discount, that should be a better use of the money. They should not buy units as the short term pop is not worth it when measured against having money available to buy something if and when, or room under their debt limits.

    I agree oil prices should recover, but have no clue how long it will take. And so we will be back in the position of waiting for oil prices to recover and then waiting again for them to market a Utica deal, while each quarter they talk about how great a job they did executing in a tough environment that they had no foresight to see.

  • Reply to

    BBEP cut after market close

    by artist_formerly_known_as_pooch Jan 2, 2015 7:17 PM
    marklibera marklibera Jan 4, 2015 10:48 AM Flag

    richrd, but they have underexecuted on the land sales by a huge margin, so the market may not be as willing to jump on the happy train. Time for them to stop talking and start producing.

  • marklibera marklibera Jan 4, 2015 10:41 AM Flag

    rbb, that sounds right. They also missed an opportunity to sell their land in the wet gas window, now with nat gas prices falling and I doubt any more Eagle Ford or Mancos land gets sold (can't wait for them to tell us that at the next report). So we are right back where we started some 3 years ago with the promise of a billion dollar sale. How many of us would have sold if they executed a Utica sale or would we have held on for the promised larger distribution only to ride it down like all the others?

  • Reply to

    OT: The year in review

    by marklibera Dec 30, 2014 12:17 AM
    marklibera marklibera Jan 4, 2015 12:51 AM Flag

    Sarge, Happy New Year. I've talked about my investing mistakes which include chasing overbought stocks and failing to detect when the trend has flipped to the downside. I have used the RSI to avoid making the first mistake and it has worked well, although sometimes you miss some skyrockets. The RSI is more of a short term tool and doesn't help with the problem of when the trend is flipping. That's when you have to look at the different resistance and support levels and the direction of the moving average lines. I wouldn't characterize your Apple as the same type of lost profit that I have experienced in the past. I think you have to look at short term, intermediate term and longer term charts to see whether a stock is merely taking a break, whether its undergoing an intermediate correction in a long term uptrend or whether it has topped out and broken the uptrend. I've had a few SDRL type collapses in my experience. The charts usually show you where the risk of the decline can lead to even when you don't want to admit that a good investment is turning sour.

  • Reply to

    After "merger" ...

    by fishinanddreaming Dec 10, 2014 2:35 PM
    marklibera marklibera Jan 3, 2015 11:53 AM Flag

    Sorry guys, but all these conflicts were disclosed. That is the bargain that you made. The lp has an initial higher yield, but the IDRs benefit the gp and eventually provide a headwind for the lp. In the begining, the trade off for the higher yield from the lp is good because the lp price also grows as the distribution grows, but then it switches to favoring the gp. It's hard to give up the large yield from the lp and pay the tax, but the market (and the legal structure) clearly favors the gp's.

  • marklibera marklibera Jan 3, 2015 11:32 AM Flag

    dwood, you might have missed Gracie's explanation of the sum of WMC's distribution components. It is true that their spread has declined, but according to Gracie, they own a bunch of derivatives that contribute a good chunk of their yield. I don't think they need to add hedges as there is no sign (other than talk from the Fed) that long term rates are going anywhere. We still have to see how the decline in oil prices weighs on employment, home sales, spending etc. Energy employment was beating all other sectors, and they pay much more than fast-food jobs.

  • Reply to

    SDLP

    by madmax19471952 Dec 30, 2014 3:47 PM
    marklibera marklibera Jan 3, 2015 11:23 AM Flag

    bush, wish it was true that I sold most of my energy, but I still own many. I sold HCLP (the sand frac play) and I doubt I re-visit that. Sold LNCO and SDLP. The distribution cut news from LINE and BBEP may stabilize the e&p MLPs like ARP, VNR, EVEP and MEMP, which may follow with cuts of their own. The action in ARP affects its gp, ATLS, which is doing a deal with TRGP (which I also own) in which it is merging the midstream part and doing a spinoff which is being valued at around $3 and projecting to pay $1.10 in distributions. Those amounts could change, but it is tempting to add there even though I already have a chunk.
    Despite the bounce in energy, due to the LINE announcement and the end of tax selling, we may still not have hit bottom on oil. Could the economy start to weaken once the cutbacks in ergy start to work their way through layoffs, etc?

  • Reply to

    Hello MB

    by madmax19471952 Jan 2, 2015 8:29 AM
    marklibera marklibera Jan 3, 2015 11:14 AM Flag

    Max, technically the crude ban has not been lifted. Instead, it's condensate that can be exported without having to get a specific company private letter ruling from the BIS, and it allows the companies to "self-certify" what they are exporting. That should benefit EPD, MMP, KMI, PAA and TRGP.

  • Reply to

    Total return for TRGP for 2014: +24%.

    by mizzou1966 Dec 31, 2014 6:14 PM
    marklibera marklibera Jan 3, 2015 11:10 AM Flag

    mizzou, there are not many if any GP's of upstream MLPs so that's where it is hard to find what the appropriate yield should be on the spinco. Agree that the current projected 33% is much too large, but 5% is probably too low. The other wild card is what will the actual distribution be. It was projected at $1.25 when the TRGP deal was announced, then cut to $1.10 in an 8-K filing. Then as I pointed out in a different post, now that LINE and BBEP have cut their distributions, there will be pressure on ARP to cut too, and what does that do to the ATLS IDR payment? True the spinco implied value could increase by a large percentage from the current implied value of $3, but most of us focus on $ gains, not % gains, whereas the p e guys like Cooperan get kickers from % gains on their holdings.

  • Reply to

    True vale of ATLS may be staring to show...

    by mizzou1966 Dec 30, 2014 5:56 PM
    marklibera marklibera Jan 3, 2015 10:57 AM Flag

    mizzou, there may be more events to come that affect the price of ATLS. As you probably saw, fellow e&p MLPs, LINE and BBEP both cuts their distributions and their stocks went up (probably because shorts covered). There will be pressure for ARP to cut theirs also seeing that it actually helps the unit price. But the Cohens have most of their money in ATLS, not ARP, which benefits from a higher ARP payment because that leads to a higher IDR payment to ATLS and a higher distribution to ATLS unitholders. If ARP cuts, then that means lower ATLS distributions. But the spinco is already yielding a projected 33% (based on the projected $1.10 distribution and implied value in the $3's). ATLS already said they have a deal in the works which may be like the Blackstone deal with LINE, so I bet the ARP distribution cut comes with an announcement of a private equity type deal with the hope that it rescues both the ARP unit price and the ATLS spinco price.

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