Forgot to add on my list BPL which is currently my fav. Look at it as a slightly better OILT as it has dock access in Corpus Christi, and east coast. Would be nice for m&a--maybe MWE or Targa or even KMI. But your right I'm stuck in AMID,ENBL,EOG, EMES, HCLP, CLR--guess I just have to be real patient with them.
Very nice post marv. As a long time investor in O&G, my vote is NOT TO BUY. Most ceos in their quarterly have guided down. There is less drilling, more stacking of rigs, cutting of overhead, and preparations for massive lay offs similar to late 80s. I personally have cut my energy investments 60% by taking profits along the way and just lightly up. Most here in Houston see the recovery in 2017. But like most recoveries, it usually takes longer (3-5years). In the mean time I have started positions in the BDCs who will fund the next leg (ie. BX for LINE). Still have positions in KMI, EPD, NGLS, TRGP, EMES, AMID, ENBL, ETP, ETE, EOG, CLR, HCLP. Best like usually, and enjoy your posts even though currently not in MWE.
Never lose a profit over a tax consideration. Making a profit is what counts. Can always offset against a loss to neutralize the tax consequence. Good luck--thanks for the reply.
Same. Also trying to figure out whether I want to keep thru merger or sell now at 52 week high. Interested in your thoughts.
Check out EMES Marv. Getting crushed right now. Wells lowered valuation more than half. Midstream is safer for now. But fracking revolution will continue after an intermission. Still need sand to frack. Upstreams are in the process of contacting their suppliers asking for discounts now and extending contracts. This is true as Wells reports. O&G management are taking their compensation in shares--showing they expect a short to intermediate turn around. Will start nibbling next year to average down. Best.
Valuation Range: $47.00 to $56.00 from $101.00 to $106.00
Our $47-$56 valuation is based on a 6-7x multiple of 2016E EBITDA and
represents 15-18% yield potential based on estimated generation of distributable
cash flow. Risks include unforeseen macroeconomic, industry and regulatory
events that affect demand for Emerge's products, the most significant being crude
oil and natural gas prices that differ materially from our forecasts, and the potential
over-expansion of frac sand supply. Aditionally, our expected frac sand volume
growth for EMES is dependent upon EMES sucessfully constructing new
mines/plants and selling increased volumes in a timely fashion
Money you are right. In 1985 after the collapse of oil Houston went into a major recession/ depression where ever other house on every block was for sale--just like Las Vegas 2008-9. Banks were foreclosing on everything they could. It was terrible for Texas. It took about 10 years to recover.
Return to normalcy 2-3 years. Hold core positions in KMI, EPD, ETE/ETP, NGLS/TRGP. Building core and trading positions in BPL, EOG, CLR, AMID and EMES. That's it for energy at this time. Had over 30 mlps at one time but no more--Rich Kinder has given us a heads up about where mature mlps go, immature mlps will be challenged--some will not make it and others will be merged. But currently risk outweighs the reward. Still my focus is on midstreams around the gulf coast. I would like to see steady, safe divvies and on other hand, safer growth. OILT was the later, but look at that--good growth, but taken out with no premium. Should have done better. Oh well--I think BPL is somewhat similar. Regarding entry levels everyone thinks differently. Best
Now is a good time to buy. Share prices are depressed, everyone thinks that American companies can't cut costs, long range plans are still in motion (LNG), chemical companies are still planning new plants, banks are staying very close to their customers and advising them early how to take cover, and the world is growing population wise. One must be careful which part of the supply chain to invest in. Midstream still remains the sweet spot for now. Would not own upstream mlps now and offshore is best limited to the integrated companies. Eagleford shale play is one to focus on. Where can resources be harvested the cheapest. Right now patience is called for and not to get caught up in end of the year tax selling or harvesting of winners. Best and productive investing for the new year.
Agree with you centerdir. Today I was driving and saw a train with lots of open cars filled with sand. The usage has not decreased. Harold Hamm is not slowing down , just shifting to more profitable areas to drill in. Will get back to the less profitable areas when prices go up. These guys have been thru these boom and bust cycles before. Also the banks have not started foreclosing yet. Nor have the banks started to go under due to being overextended in o&g.
Currently most e&p mlps are preparing their budgets for next year and are cutting costs by about 20%--that's the whisper number. They are going to try to do more with less. Rig count will go down, but will put more sand thru to get more out of them. I think your calculations are a little bit off. Best
Added some yesterday at the open. Good value and won't stay this low forever. The great American energy will continue after a cleansing phase. Best
Sentiment: Strong Buy