Yes, the opportunity to make money. I like these refiners MLP, the attraction is the crack spread, obviously. This crack spread will have legs for sometimes, my guess is 2014. Then, it will be equal to the transportation costs. I still believe the R&R transport will be around for the next 5 years, minimum. The pick WTI production is not known as yet. It may be huge, good by Brent, hello WTI.
Her math is right: 70mm barrel X 16%= 11,200,000 barrel X what ever the ANS price is. The proceed will be divided by the outstanding units 2,400,000 units. The distribution will dry out quickly.
You may be right but, it may go the SFO Bay Bridge way! Manufactured in China with RIO, VALE and BHL IR and assembled in SFO? LOL
ALDW is a volatile MLP, 65.5 MMunits is not that much. Therefore a small movement on the buy/sold moves the units appreciably. The 100 days moving average is 708.5K, the 50 days 290K, the 20 days 305.7K . ALDW is new and people do not understand the Crack Spread. They understand the better than average distribution. ALDW is well position to take advantage of its refineries location and the WTI discounted pricing. We are entering the summer season and the profits should be more than adequate for the next 6 month. The Midland and Cushing pipeline bottleneck is not over, will be around until 2015.
By definition a US Royal Trust based on a commodity is limited in time. The value of the US Royal Trust is the commodity that each unit represents. Since the distribution is the sale price of the commodity divided by the outstanding number of units, once all the volume of the commodity is sold, no more distribution. Some US Royal trusts define the volume of the commodity associated with the US Royal Trust or have a time limit, the case with WHZ. Once IPOed, the assets of a US Royal Trust cannot be modified. Once the volume or time is attained no more distribution. This is why US Royal Trust has units, not shares and distributes, do not have dividend.
Investing in a US Royal Trust means you buy a percentage of the commodity which is represented by the number of units you buy. You do not share anything; you get paid for what is sold which you own and which is managed by a third party. That third party owns the infrastructure which produces the commodity for sale.
You have to understand the difference between a “dividend” and a “distribution”. Then, you are so confused and inapt for lack of connected neurons.
The ex-dividend date is two business days prior to the record date. To be a stockholder on the record date an investor must purchase the stock before the ex-dividend date. The latest date he can buy the stock to be a stockholder on record and be entitled to the dividend would be one day prior to the ex-dividend date to allow for the three stock trading day settlement of the stock purchase. If the investor purchases the stock the day before the ex-dividend date the investor would be a stockholder on the record date and would be entitled to receive the dividend payment.
The world IR price is down substantially. My perception is that the IR marketing changed 3 years ago. It was based on individual contract agreements and became an index posted daily on several web sites. The world price went from $75 the metric ton prior 2010 to $200 per metric ton in less than 1 year. China was the biggest buyer with Rio Tento, BHL and VALE the main suppliers. Now China is not buying in large quantity and the IR price is down to $135.
CLF own the Messabi IR mine. It is exploited as a US Royal Trust. The amount of IR sold by the trust has a yearly limit. MSB is not able to participate in the world price because it is land locked around the Great Lakes. Therefore MSB is subordinate to the steel production around the Great Lakes. To explain one of the drawbacks MSB and the US steel industry is the case of the new San Francisco Bay Bridge. The manufacture of the bridge was done in China and the assembly in San Francisco. The steel tonnage was made in China with Rio Tento, BHL or Vale Iron Ore and CLF to some extent.
CLF has other mines in the US and Australia that can participate in the IR world market. CLF own also coal mines that are used in the making of steel. CLF split 3 times 2005, 2006, and 2008. In 2008 CLF was a $180 stock prior the 2 for 1 split. By the end of 2008 CLF was down to the $20s. This matches the closing of the Messabi mine. By 2011 CLF was back to the $90s. MSB sees the same pricing; in 2008 MSB was in the single digit around $9.00. By 2011 MSB was in the $40s.
The IR business is a commodity that moves greatly with the economy. Contrary with O&G which has a large consumer base, IR moves with economic stimulus, not user base. I do not believe it is a good time to by CLF or MSB, the world price of IR is down.
A US Royal Trust is available to any financial entity. Once IPOed it cannot be altered, change or revoked. MLPs, on the other hand, is only available for commodities, and can be modified at will. A MLP can include another corporation, such as with KMP.
US Royal Trust can have an indefinite life, or a limited life. As with WHZ it is limited in life or by the quantity of, in WHZ case, the oil volume sold, which ever come first.
US royal Trust, as it applies to O&G represents the volume of oil or gas or both. The dollar amount at IPO is divided by the number of units shown on the IPO. All infrastructure are not included in the IPO. This is why US Royal Trust does not have UBITDA.
MLP does include UBITDA because it has depreciation, expenses etc, the infrastructure is included in the MLP.
I used to own MSB but have sold 2 years ago. The world IR price is down substantially. My perception is that the IR marketing changed 3 years ago. It was based on individual contract agreements and became an index posted daily on several web sites. The world price went from $75 the metric ton prior 2010 to $200 per metric ton in less than 1 year. China was the biggest buyer with Rio Tento and BHL the main suppliers. Now China is not buying in large quantity and the IR price is down to $135.
MSB is not able to participate in the world price because it is land locked around the Great Lakes. Therefore MSB is subordinate to the steel production around the Great Lakes. To explain one of the drawbacks MSB and the US steel industry is the case of the new San Francisco bay bridge. The manufacture of the bridge was done in China and the assembly in San Francisco. The steel tonnage was made in China with Rio Tento, BHL or Vale Iron Ore.
The last time MSB was a really profitable was in 2008 when the mine was shut down and reopen. The distribution went from practically zero to a descent distribution. At the time I did not understand the situation. The following season I got in and did not make the anticipated profits, I was too late. The US economy is not going to support the Great Lakes until it gets going. The government cannot tax more to support the refurbishing of existing infrastructure. Than, the case of California will come into play. Had California gave the Bay Bridge contract to an American contractor, the cost would have been 50% more??
ALDW primary profit is the crack spread caused by the Cushing bottle neck. New pipeline will come in line and diminish this crack spread. The crude transport by rail is starting to go around the Cushing bottle neck with some success. ALDW will not benefit from this crack spread by the end of 2014 or sooner.
My analogy of comparing US Royal Trust and standard corporate equity with Cows and Jackasses need some explanations.
A Cow produces milk, the US Royal Trust represent the potential of a cow to produce milk. The milk produced is sold at an anticipated milk production to individual units holder, this means you buy milk. The milk producer pays the trust unit holder with the amount of milk sold each quarter calendar. You, unit holder, get the amount of milk sold less expenses. The milkman own the cow, when the cow cannot produce milk, you unit holder, get nothing, and the milkman sells the cow for meat, but the meat money stays with him.
A corporation owns a number of jackasses. The corporation makes money on the loads transported by the jackasses on their back. Then you as investor you hope the jackass will go where you want. Jackasses are known to have one mind set. You investor has not mean but to hope the jackass will go where you want. Then has sometime done, the jackasses are changed to mules. You investor has little or no means to change but to sale you shares of the corporation. You has investor has no means to know the amount of dividend, since you cannot know what is sold where, and why.
With the US Royal Trust you know what is sold and for how long, you know the sale price. You know the amount of milk for sales and you can anticipate the age of the cow, how long the beast will produce milk.
That is US Royal Trust 101, for free.
US Royal Trust are not paying dividend, they DISTRIBUTE, what they sold and divide what is left over after expenses by the number of units. Your position is your investment in the trust. The trust is the amount of oil or gas to be sold.
Confusing US Royal Trust with a company or corporate stock is comparing a cow with a jackass: guess who is the JA?
Short vision on a mega inflation in the long term. Printing money has never made things better. Those that pay the bill is the ones that cheer at free money. Nothing is free!
I will sell after xdate and be on the side line for a while. Yes, it is a line of thinking that the spread will narrow then increase again. Today no one knows what the new pipelines will impact the flow to the GOM. The rail transport is affecting the East and West Coast Brent prices. The question mark is the GOM. My guess is that the WTI production will increase more that we can see today. So Crack Spread will still be with us, but around $5 to $10, not the $15 and more of today. We will have to wait 2014/2015.
Lots of new faces on the BOD, and this production problem. I would wait a while. The BOD may cane the CEO in June. Things are fluid still?
Cramer is not my type, this is the example: KMP unit price/distribution is $89.65/$1.29 or $129 for 100 units returns. On the other hand WHZ price/distribution is: $13.88/0.65 or $650 per 100 units Why would I invest 100 units to fetch only $129, when WHZ will fetch $650. Assuming an equal number of units, the risk factor is with WHZ, I have lot less invested, and should the unit dive 10%, my losses will be infinitely less with WHZ. Cramer is not look at the stock market with the small investor eyes. He looks at the hyper traders that buy and sell in seconds. I keep my buys for longer periods but seldom months.