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PIMCO Dynamic Income Fund Commo Message Board

not_totally_gray 40 posts  |  Last Activity: Apr 24, 2015 10:13 AM Member since: May 14, 1999
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  • not_totally_gray not_totally_gray Apr 24, 2015 10:13 AM Flag

    I don't think they're even reading the Moody's release. Obviously they missed this part:

    " Moody's analysts said that proppant companies' ability to quickly respond to customers' supply and cost efficiency needs will be vital in the coming year, noting U.S. Silica (Ba3, stable), Fairmount Santrol (B1, stable) and Hi-Crush (B2, stable) as companies well-positioned to increase market share as the sector continues to go through a down cycle."

  • not_totally_gray not_totally_gray Apr 24, 2015 10:04 AM Flag

    EMES paid out $5.09 in last 4 quarters, so while they are reducing 1st quarter dist by 29%, for full year they are guiding for 40% reduction. Ouch...

  • not_totally_gray not_totally_gray Apr 24, 2015 10:03 AM Flag

    What's surprising is that they are signalling even lower distributions for future quarter -- if they're paying out $1 in first quarter but guiding for $3 for full year, that's only $2 over next three quarters, so you're looking at a quarter distribution of $0.50-$0.60 by end of year. Most companies would do one large cut now and get it over with.

    This is exactly the flip side of the frustration every HCLP shareholder felt last year watching EMES rocket higher 2X or 3X HCLP. This is what we all told ourselves, that HCLP was the more conservative play and in a downturn EMES would get hit harder, so hopefully that is what we will see -- HCLP being able to maintain distribution because they have been managed more conservatively, and we made the right choice after all. But I still think we will get punished in sympathy and $40 will not happen any time soon.

  • Reply to

    Decrease to $3.00 per unit for the year

    by davidrichardsonj Apr 24, 2015 8:19 AM
    not_totally_gray not_totally_gray Apr 24, 2015 9:57 AM Flag

    "It's still $1. "

    If they're guiding for $3 for full year, that means more cuts to some -- $1 for first quarter means only $2 more over next three quarters. They paid out $5.09 last 4 quarters, so a cut to $3 is 40%.

  • not_totally_gray not_totally_gray Apr 23, 2015 10:09 AM Flag

    fwiw, another 17% distr increase announced by MMP today.

  • not_totally_gray not_totally_gray Apr 21, 2015 5:09 PM Flag

    MMP is the absolute gold standard for growth. The number that separates MMP from every other MLP is that they haven't issued new shares in something like TEN YEARS -- *all* of their growth has been internally financed, which is why they grow distribution +15% every single year. IMO the difference in the stock price is simply that EPD is so heavy into NGLs which is a softer business in current commodity environment than MMP, but of course buying it now gives you the upside when growth resumes. MMP bought all of BP's storage assets in Cushing for a song a couple years ago post-Macondo, how much money are they making on them now with every tank in Cushing overflowing? But I don't think you can go wrong buying EPD here either -- buying great companies at the bottom is what you're supposed to do.

    Both companies have also benefited greatly from buying in their GP -- IMO you should strongly consider limiting your choices to those that either don't have a GP, or are a GP, if you want to focus on best-of-breed.

  • not_totally_gray not_totally_gray Apr 21, 2015 1:47 PM Flag

    "That translates to a 14% annualized return on their total assets under management "
    That's about what we got last year when you add in the special div.

  • Reply to

    SSWN 6.375% -Mature in 2019 now below par (25)

    by melvin10512 Apr 16, 2015 8:19 AM
    not_totally_gray not_totally_gray Apr 21, 2015 10:14 AM Flag

    The best thing about them IMO is that by the time they mature, hopefully bond yields in general will be (finally) higher, so they look like a nice way to park cash for four years waiting for rates to rise. I usually like to buy longer-term investment-grade bonds, but of course haven't been doing much of that last couple of years. I think SSW's credit profile for next 4 years is pretty solid with the new ships coming on line and current contract status of the rest, so I'm a lot more comfortable with these than other junk bonds.

  • not_totally_gray not_totally_gray Apr 16, 2015 9:49 AM Flag

    Could that be a cap gain if they sold a large position? Not sure if cap gains are considered part of NII.

  • not_totally_gray by not_totally_gray Apr 15, 2015 2:24 PM Flag

    another bounce back from exactly $40 this afternoon... I bet if we get another dist increase, we'll break right through. The 15th is about when it should be announced.

  • not_totally_gray not_totally_gray Apr 15, 2015 12:58 PM Flag

    This article from Seeking Alpha explains it well:
    "The intention behind the fund is excellent: simplify the often complicated process of owning MLPs by applying an ETF wrapper to the broad asset class. However, AMLP is not the right vehicle for the majority of investors, and it represents one of the rare cases when buying the ETF structure makes very little sense.

    Legally MLPs can make up only 25% of a portfolio registered under the Investment Company Act of 1940. Most mutual funds and ETFs are structured this way. To get around this issue, AMLP is actually structured as a corporation that pays income tax: Before return is passed on to the investor, it must be taxed at the corporate level. Although AMLP's prospectus expense ratio is 0.85%, its gross expense ratio (which accounts for these tax liabilities) is almost 5% as of September. As a result, AMLP has lagged its index significantly. Over the past year AMLP lagged by 10%, and since inception it trailed by a shocking 40%. The upside? When MLPs are down, AMLP declines less because it can reverse some of the deferred tax liabilities it has accrued. For all but the most risk-averse yet desperate-for-yield investors, this downside protection is not enough to make up for the fund's structural issues."

  • Reply to

    Anybody own this stock besides me?

    by tshotglass Apr 10, 2015 3:24 PM
    not_totally_gray not_totally_gray Apr 13, 2015 1:29 PM Flag

    you have to like the fact that even after announcing a large secondary -- which ought to price at some discount to current market price -- stock has been moving steadily higher all day.

  • Reply to

    Anybody own this stock besides me?

    by tshotglass Apr 10, 2015 3:24 PM
    not_totally_gray not_totally_gray Apr 13, 2015 10:10 AM Flag

    I own it too, just bought some more about 2 weeks ago because 7.5% yield was just too high. IMO the added publicity will be just as valuable as the new assets, it's been a very undiscovered under-the-radar stock, no reason why this shouldn't trade at a 6% yield. If this deal really does yield $0.28 in extra FFO, and they pay out 80% of that, that takes the div to $2.30 all by itself. Stock should easily trade in upper 30s at that point.

  • not_totally_gray not_totally_gray Apr 12, 2015 9:34 AM Flag

    not saying this makes it a bad investment -- if I was investing in an IRA it might make a lot of sense -- but it might work better for you, it might not.

  • not_totally_gray not_totally_gray Apr 12, 2015 9:32 AM Flag

    from morningstar:

    "However, the fund has major drawbacks. AMLP is a corporation, not a fund registered under the Investment Company Act of 1940 like most ETFs, because open-end funds are not allowed to have more than 25% of their portfolio in MLPs. The fund is liable for taxes at the corporate level, which has caused AMLP to lag its underlying index by a staggering 8% annualized since inception through the end of February. With other investment options available that track the performance of MLPs much more closely, investors should carefully examine whether AMLP's costs are worth its benefits.

    AMLP's lagging performance is a byproduct of how tax-deferred MLP distributions behave in a fund structure. MLP unitholders are liable for taxes on their share of the partnership's income every year. Fortunately, the bulk of MLP distributions is considered a return of capital because MLPs use depreciation to offset their net income. Instead being an immediately taxable event, distributions reduce an investor's cost basis. Taxes are only owed on the distributions when an investor sells their units. At that point, the IRS views the income as recapture of past depreciation deductions, and investors will owe their ordinary income rate. Functionally, the investor is able to defer paying taxes on distributions until they sell their shares.

    Because AMLP is a corporation, the fund itself has to pay corporate taxes on the adjusted cost basis when it sells underlying investments or if it ever liquidated. AMLP accrues for this future tax liability in its net asset value, which means AMLP must give up about 38% of its return in every year when the fund's total return is positive. Because MLPs have done so well in recent years, this tax drag caused the fund to significantly lag its benchmark. On the flip side, AMLP will decline less than its ETN competitors in a down period because it can reverse its tax liability reserve."

  • Reply to

    Sold KMI, bought EPD

    by not_totally_gray Mar 25, 2015 1:36 PM
    not_totally_gray not_totally_gray Apr 10, 2015 1:02 PM Flag

    the higher yield is simply due to leverage. I own EPD in a margin acct already, plus I am saving fees + tax inefficiency.

  • Reply to


    by tsjdiet Apr 7, 2015 10:22 PM
    not_totally_gray not_totally_gray Apr 8, 2015 10:58 PM Flag

    If you carefully read the statement in the press release -- focus on the highlighted phrase -- tends to support your guess:
    "Given current economic conditions affecting the frac sand industry as a whole, *** as well as the specific mining and processing economics at Independence***, we feel that the project is no longer economically viable."

  • Reply to

    My broker told me to put $200,000 into

    by donatt7 Apr 2, 2015 9:12 PM
    not_totally_gray not_totally_gray Apr 8, 2015 5:27 PM Flag

    In 2013 PDI dropped around 20% in three months, when it looked like interest rates might be about to go up. So IMO keep that in mind and ask how comfortable you would be with a 20% drop in market price, given likelihood of rate increases in next year. Fond as I am of all the money I've made holding it, at the end of the day it's still a leveraged fund that holds lots of esoteric debt securities, and you should assume that if fixed-income markets get stressed, the same thing will happen.

  • Reply to

    Why is it down pre-market?

    by nedelkay Apr 7, 2015 9:01 AM
    not_totally_gray not_totally_gray Apr 7, 2015 5:27 PM Flag

    I'm an AVIV shareholder who just got my OHI shares and am looking to buy more on this dip. I doubt very much any AVIV shareholders are dumping OHI, in contrast we're all thrilled that we're finally getting a div increase.

  • Reply to

    Sold KMI, bought EPD

    by not_totally_gray Mar 25, 2015 1:36 PM
    not_totally_gray not_totally_gray Mar 26, 2015 2:26 PM Flag

    I've owned MMP for ages -- used to own their GP when it was publicly traded, and held on to the MMP shares I received when it was bought. Have NOT sold any MMP, and don't intend to. Part of the EPD scenario is I'm already way overweight in MMP and don't really want to buy more, but EPD has a lot of the same positives as MMP. I agree they're a super pair.

29.98+0.28(+0.94%)Apr 24 4:02 PMEDT