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Enterprise Products Partners L.P. Message Board

marklibera 392 posts  |  Last Activity: Apr 18, 2015 6:18 PM Member since: Aug 14, 2007
  • Reply to

    O/T the market

    by williamlebotschy Apr 18, 2015 9:34 AM
    marklibera marklibera Apr 18, 2015 6:18 PM Flag

    I could be wrong, but "sell in May" usually comes if the market has really increased in the Jan to April period. The market (using the S&P 500 as the base) hasn't done much since hitting a high in Dec, but the slope has still been up. Is this just a pause that refreshes or a sign that the market is rolling over? One thing is that with all of the alphabet soup --QE, ZIRP, HFTs and ETFs -- it's difficult to know if the old rules mean anything anymore.
    What is clear is that money is starting to flow to other countries where the chances of higher returns are greater. The US market has more than tripled since its March 2009 low, so how much more can it go up, especially if it is trading near all-time high valuations. Sure, many US stocks are global so their earnings might still increase, but it is the rate of increase of those earnings (assuming that a high dollar doesn't actually hurt earnings which it has in some cases) which might matter more.
    One thing that hasn't happened is that the decline in oil prices has not led to increased consumer spending, but the energy sector, which at one time was 12% of the S&P, has suffered. Since spiking in Dec, the transports are down. Are the rails bringing the Transport sector down because of expectations that oil shipments by rail will suffer?
    The next 3 weeks are prime earnings reporting. We will see if the market thinks earnings meet the low bar

  • Reply to

    OT: Huff - look out below on AAPL

    by dividendhunter Apr 15, 2015 3:08 PM
    marklibera marklibera Apr 18, 2015 5:46 PM Flag

    Bob, my problem with these types of articles is that they always seem to mention the company's hedge book as being good without necessarily describing it or comparing it to their competitors. Line was supposed to be protected by its hedges but then it turned out that they had also sold out of the money puts, which sank in value when prices dropped. All e&p MLPs are supposed to hedge, but MEMP is routinely mentioned as having the best percentage into 2016.

  • Reply to

    O/T CPLP

    by rich_mo_florida Apr 15, 2015 8:29 PM
    marklibera marklibera Apr 17, 2015 1:59 PM Flag

    You would think that sophisticated investors would know the difference between distribution coverage which is based on their accounting numbers (although it is a non-GAAP term) and ROC which is a concept determined from their tax info (earnings and profits as determined under the tax rules).

  • marklibera by marklibera Apr 17, 2015 1:54 PM Flag

    I guess it was a tad bit premature to announce that everything was ok with corporate earnings and that the market would just continue to power ahead as if there was nothing to worry about whatsoever. Maybe it's just a Friday selloff and it will be easily overturned when some good corp earnings get posted next week. The good news is that the Fed isn't raising rates anytime soon so even if we get a mild correction, buyers will emerge once again, just at a lower level.

  • Reply to

    BX and CSCO

    by sarge198502 Apr 17, 2015 8:27 AM
    marklibera marklibera Apr 17, 2015 10:02 AM Flag

    I mentioned CSCO after seeing their CEO interview with Charlie Rose. He mentioned that more and more of CSCO's business is in cyber security. The stock has had a nice run up, but I think it looks to be rolling over a bit and could retest the $26 area. It looks like that is the previous pattern for CSCO -- run up and then come back to the area from which it broke out before resuming an up. But that $26 must hold.
    Apple just broke below its 50 dma after hugging that line for sometime. It too has a similar pattern that it showed before. Apple ran up to a high in Dec, but then spent the next 2 months going sideways to down, and even broke below its 50 dma before finding support. It could do the same thing again before finding support around $117. As I said before, the iwatch is not really a factor. That said Apple usually doesn't have any problem beating their earnings and the stock is still not expensive.

    I stated before that KCAP chart looked like a loser when some were chasing its high yield and I was right. It could bounce since it has been hammered, but it must have sold off for a reason.

  • Two WSJ articles on oil production and one on the Fed not raising rates. One article pointed out that the oil production numbers and projections have been all over the place, but stated that if prices keep rising, more production will come. Seems like OPEC will fill any production decline from the US. While the article said that production slowed in the Bakken, it didn't mention anything about the North Dakota tax incentives that begin in June which may have the effect of raising production there.
    The article on the Fed said that the weak economic data is making some Fed members rethink raising rates (what a surprise there). Of course that is going to be good for the stock market (unless you are banking on rates going up) as continued low rates should overcome any weakness associated with earnings misses, even if the earnings misses may cause a temporary pullback.

  • Reply to

    OT: Oil, Dogs of the Dow

    by syzygyzys Apr 14, 2015 3:44 PM
    marklibera marklibera Apr 16, 2015 9:56 AM Flag

    News item out that Saudi oil production increased to a record high. This bounce in oil is probably short-lived and due to some demand pick-up from the refineries getting back to work.

  • Reply to

    KMB

    by sarge198502 Apr 9, 2015 8:42 AM
    marklibera marklibera Apr 16, 2015 9:18 AM Flag

    Ed, I bailed on AM, TRGP, WGP, MWE and a few others. I bailed too late after a lot of profit was given back and too early to catch the bounce, but at the time it looked like the midstreams in particular were clinging to estimates that were too high. I was hoping to re-enter TRGP, but now it has run up a bit on another article mentioning it as a takeover play. To me, it looks like it will hit resistance soon.
    Getting ready to shed ARP. I now have lots of cash to buy both TEGP and EQGP (the gp's of TEP and EQM) when they come public. I never added back O.

  • Reply to

    OT: Oil, Dogs of the Dow

    by syzygyzys Apr 14, 2015 3:44 PM
    marklibera marklibera Apr 15, 2015 1:48 PM Flag

    If I recall the investors in BBEP bought convertible preferred (and probably shorted the common to lock in an arbitrage). There's a difference between liking the company as an investor higher up in the capital structure and liking the common stock where it was trading. But Pale you are right that often the worst positions stocks have the greatest bounce (at least initially) once their survival is no longer threatened.

  • Reply to

    Oil back up?

    by jkprice Apr 12, 2015 11:50 PM
    marklibera marklibera Apr 15, 2015 1:41 PM Flag

    Two problems here. The unemployment numbers don't seem to have these job losses factored in yet, but considering that the unemployment number is based off of a survey, it's not surprising. I'm not seeing the decline in production that people are referring to, at least looking at EIA reports. Just because the industry is laying off people does not mean that those wells stop pumping.

  • Reply to

    Bought again this morning

    by griffin.mungus Apr 14, 2015 10:09 AM
    marklibera marklibera Apr 15, 2015 12:24 PM Flag

    What is this decline in production that you speak of? I thought the production and supply were both still rising. There might be a blip of a decline now that the refineries are back up and preparing for driving season, but as the price rises that keeps production up. Then there is the North Dakota tax incentives that kick in in June.
    On a chart of $WTIC, I see resistance around $55.
    This rise in oil and the rise in e&p MLP prices is going to allow these companies to raise some equity to pay down their debt levels. That may take the pressure off of Fall borrowing base re-determinations and the threat of further distribution cuts for now. But how far can the stocks rally? I can't imagine their yields getting close to 12%. Maybe slightly under 15%, but no lower especially if hedging for 2016 doesn't improve. Meanwhile nat gas is still in the doldrums and could go lower still.

  • Reply to

    New CEO

    by dragon.slipper Apr 14, 2015 12:13 PM
    marklibera marklibera Apr 15, 2015 11:45 AM Flag

    ARP was not involved in the Targa deal, so why change mgmt there unless someone is to blame for the recent poor performance. With the Atlas companies, you always have to be wary of something. Remember at the last earnings call, before they slashed the distribution, they hinted at Q1 being light. The whole sector has been under pressure and you don't see other e&p MLPs firing upper management.

  • Reply to

    Exiting SFL, reducing NMM

    by keebon Apr 14, 2015 10:02 AM
    marklibera marklibera Apr 15, 2015 9:49 AM Flag

    It's difficult to trade WMC and capture the dividend at the same time, although sometimes it can be done. I think for now the stock appears to be range-bound. Maybe the right way to play it is to keep a core position for the divy and trade the ranges for extra income. The trading allows one to hone in on the best enter and exits points.

  • Reply to

    New CEO

    by dragon.slipper Apr 14, 2015 12:13 PM
    marklibera marklibera Apr 15, 2015 9:10 AM Flag

    I'm wondering about the timing of this change. Why now? Could this mean that they missed real bad in the first quarter

  • Reply to

    OT: Oil, Dogs of the Dow

    by syzygyzys Apr 14, 2015 3:44 PM
    marklibera marklibera Apr 15, 2015 9:07 AM Flag

    It's funny how some people criticize those so-called pundits for being wrong about calling for a market decline, but forget all of the permabulls who never saw the 08-09 crisis coming. The other day there was a story about a Time magazine article advising someone to invest a windfall 100% into stocks right now. The article included a chart which showed the 10 yr expected return from different asset classes and the return for US stocks was projected at close to 0 over the next 10 years (the projected return on Emerging Market equities led the way). I've seen this metric quoted by some veteran professional money managers like Jeremy Grantham and Howard Marks who have been around long enough to see a few bear markets. The mistake some make is thinking that big money doesn't care about value and expected return.

  • Reply to

    Oil back up?

    by jkprice Apr 12, 2015 11:50 PM
    marklibera marklibera Apr 14, 2015 2:55 PM Flag

    As I said before, it may still be too early to call the bottom in oil. With the refineries back and the driving season beginning, it was to be expected that oil would bounce back. But the production numbers were still higher. Let's see where we are in June, when those North Dakota incentives kick in.
    As for the chart, looking at $WTIC, shows some resistance ahead at $52 and again at $55. Comparing to the nat gas chart, we also saw a similar pattern in which it appeared that nat gas (I'm using $natgas) was bottoming around $2.60 from Feb to early April, but that has now broken down.

  • Reply to

    KMB

    by sarge198502 Apr 9, 2015 8:42 AM
    marklibera marklibera Apr 14, 2015 2:37 PM Flag

    Still waiting for the IPO of their gp. Should be less than 2 months.

  • Reply to

    FED - So what?

    by jackadd9 Apr 10, 2015 8:33 AM
    marklibera marklibera Apr 12, 2015 10:20 AM Flag

    I think Tom has it exactly correct. It's about spreads and the leverage applied to those shrinking spreads. Even if you look beyond mREITs, the historical analysis shows that the first few interest rate rises don't cause the economy to turn into a recession, but it's the last rate rise that flips it into a recession (seems tough to determine when the Fed has gone too far except to notice when it turns the yield curve negative). However, this has not been a normal expansion by any stretch as we have been in ZIRP for 7 years. So no one knows if this is going to compress the time it takes for an earings recession to come. As we saw with the taper tantrum, the first rate hike will inevitably cause a stampede out of mREITs and many other interest sensitive sectors, but will probably cause a buying opportunity, especially if the hike is "one and done."

  • Reply to

    BACK TO THE FUTURE...!

    by staggman99 Apr 10, 2015 3:45 PM
    marklibera marklibera Apr 12, 2015 9:44 AM Flag

    I've been thinking 2200 on the S&P as an intermediate high, followed by a correction to 1850. Not sure of the order that they might occur. If we get through Q1 earnings season without major disappointments and with the Fed rate rise put off (again) we could see higher than 2200 in a burst, but that would be the warning to start taking money off the table. The best guide throughout this whole cycle has been the S&P channel -- when it gets above the channel, it almost always declines. Breaks below the channel have been tougher to analyze, because everyone starts to expect the "big correction" but the market magically finds support with a less than 10% decline.
    But not everything is participating in the rally. We are seeing sector rotation. Interesting how the major averages can keep climbing if all the sectors are not participating equally.

  • Reply to

    OT: STAG

    by pay.back37 Apr 10, 2015 2:14 AM
    marklibera marklibera Apr 12, 2015 9:33 AM Flag

    One of the chief criticisms of IBM has been that they spent a lot of money buying back stock and issuing a ton of debt to do it. It raised the EPS but the overall revenue has been flat or declining. It seemed to work early in the bull market as the share price rose but the stock is off some 40 points since hitting its high at 200.
    So the overall point, is, no matter what the sector, you can't just rely on metrics, but you have to look deeper in how the company is achieving those metrics. Companies that use high amounts of debt, whether for acquisitions or buybacks, become vulnerable in a recession. When the economy is strong, no one worries about debt and the debt actually produces leverage that can bolster returns. But the opposite becomes true when it flips.
    We have seen this recently with companies like SDRL and many e&p MLPs. It wasn't a rise in interest costs that turned those stocks south, but rather the high debt levels.
    It's rare that a company or even the analysts will sound the alarm about a company's debt levels in comparison to past cyclical highs. That's what one has to watch out for.
    As for anything real estate related, you have to watch the debt levels. Real estate companies can be great investments when the cycle is hot, but it's when it changes that you have to watch out. You have to look for the signs that things are getting frothy, like mergers which occur because companies can't find organic growth, and also have the effect of increasing debt.

EPD
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