Will shorts begin to cover or are they, based on increasing EBITDA coverage, out of the game? Bad news seems to be out. We will see but there are probably better targets than EROC based on the earnings, conference call and strong price recovery during the trading session.
POLL: What did you expect EROC to earn? Did you expect a continued distribution of 22 or a cut? If so what did you do prior to today based upon what you believed would happen today? What are you doing now? Buying selling or waiting and if waiting what price are you waiting for?
RESULTS: Based on preliminary financial results for the quarter ended September 30, 2013 (subject to the completion of the Partnership's quarter-end review), management expects to report Adjusted EBITDA of approximately $62.8 million, which would represent an increase of 12% over the second quarter 2013 amount. Management expects to report distribution coverage of approximately 1.05x for the third quarter of 2013, and expects that level to increase over the next several quarters.
Management anticipates that the lower distribution level coupled with an anticipated growing distribution coverage over the next several quarters will allow the Partnership to redirect some of its cash from operations toward debt repayment in the near term, which will benefit the common unitholders in the form of greater equity value, and the Partnership in the form of greater liquidity and financial flexibility
Some stocks are just targets. Reminds me of Apple. No matter what happens, it is treated as a negative.AND there seems to be a different set of rules no matter what the numbers tell you. Any positive events are glossed over or ignored and anyone who follows these so Called analysts from Seeking Alpha etc. will be Left in the dust as those like Icahn and others are looking at the company from a different set of lenses. Apple has been rising steadily. In the case of EROC, just what were the expectations of the analysts following this stock? Doesn't this usually accompany an earnings announcement from news outlets? The prospect of a cut in distribution was very real and was seemingly reflected in the price of EROC? Was it not, after all, the price went from $10 to under $7? A more than 30% drop. So why do we see another large hit this morning when events are seemingly much clearer regarding coverage and strategy going forward?
I do not have answers and not suggesting anyone purchase but based on what I read in the announcement , this drop is not justified.