And this guy should be embarrassed that he has been sucked in again by Kinder
BS. His latest article is a joke. "Kinder's strategy is no longer merely to grow the dividend, but to increase the return." Well guess what, Motley Fool, he cut the dividend 75%, exposed the shareholders to a massive tax hit, and the stock tanked so now shareholders have a tax hit, a capital loss, a decimated dividend, He could grow the dividend for 20 years and not make up for his stupidity in getting over leveraged. and the resulting mess he caused. This isn't a new strategy that this genius came up with. He was forced into it because no one would lend him any more money.
The analysts are still in the thrall of that idiot Rich Kinder. They think he knows what he is doing instead of he just made an awful mess of the LP. Now he suggests he might someday restore a FRACTION of the dividend he decimated and his stock pops. What a joke. Im with you, I would not touch KMI.
And the strangest thing is "Where are all these shares coming from?" Who would sell when they know a 15m buyback is coming? Abengoa is gone. Idiot's ex-wife is gone.
At these prices that would be 10m shares but the price would not stay here once they start. Of course these jerks might never start, they are so freakin incompetent, they cant even buy shares.
This is the hard part of "buy and hold". EPD is my biggest position. I have been in for over a decade so my purchase price is around $12. And the distribution keeps going up so all is well from that standpoint. It is just hard to see the net worth drop day after day.
The Barrons mistake has been multiplied by even tagging it on CPLP. The company Barrons was talking about is CCLP, not CPLP.
As I have posted before, its mysterious. The stock is selling for less than its cash, and you effectively get any potential lawsuit settlement and the value of the biopharma business for free. Now, the lawsuit could net nothing. But I will hold to see what happens during the buyback and then I am out.
I'm surprised Abengoa let it go so cheap, considering Dyai is in repurchase mode, but then Abengoa is in a world of hurt financially and may file chapter 11, and with oil at $30 their biofuel business makes no sense. And since the sale to Dupont there is no reason to hold Dyai stock.
This guy at Valuentum is a complete idiot. There is nothing wrong with the MLP business model. What he MEANT to say was "the MLP business model may not survive for those morons like Rich Kinder who got over leveraged, bought even more leveraged questionable assets, paid a bigger distribution than they could afford and generally made a series of mistakes that any undergraduate finance student with better than a D+ grade point would be smart enough to avoid." But they still consider Rich Kinder to be some kind of deity and if he got screwed up the model must not work. These analysts know NOTHING.
And I really consider the stock buyback a waste of money. They should retire the debt rather than let it convert at $1.28 and then buy the shares back at $1.65 or plus. And a buyback wont work here. The market considers the numerator to be worth "0" so it doesn't matter what the denominator is.
I don't know. The market is a discounting machine. And currently they have discounted the $75m from Dupont (figuring this #$%$ management will just squander it away) so the stock is not even selling for the cash per share that will be on the balance sheet. That also means the market thinks they will get "0" from the lawsuit and that the value of their pharma business is "0". It is very disappointing that they did not settle. The defendants must think they have a pretty good case or maybe Mark is just being arrogant as usual. But the losers if he is wrong will be us.
No distribution is ever completely safe. And the cuts others are making in their distributions provide cover in case management decides to be more conservative. But I'll tell you what IS safe, it is safe to assure you that the yield will not remain 18%+. Either the stock will recover once management announces next quarters distribution or management will cut it since the market is not giving them any credit for the job they are doing.
Another piece of political BS, just like "mission accomplished" and "I did not have sex with that woman". The deal almost fell apart over the choice of "shall" vs "should". If they chose "shall" then there would be a legal obligation and no one would agree, not even us. So they chose "should", which only creates a moral obligation which everyone can ignore for the next 35 years. Meanwhile the Energy Institute estimates that coal use will continue to rise worldwide for at least the next 25 years.
As shareholders in ARLP we own the best, lowest cost producer and a company that still manages to profit at low prices since they are the best, but as coal prices remain low I fear even they will feel the pinch and a 20
% yield is crazy. The only way out is to elect a Republican, but they are doing their best to insure we have a repeat of 1964 by nominating a crazy person and causing Hillary to be elected.
Sometimes the nonsense these analysts write is breathtaking. Now they say KMI recovered today, "see, the dividend cut wasn't the end of the world". It wasn't? The stock is only down from $40 to $17 over the last few months as it was obvious pressure was building on the dividend. And now that the news is out it recovers $1 of the $24 it lost? Not so bad? What are you smoking?
I don't know about a distribution cut. KMI made some bad moves and their credit rating was imperiled. That is not the case with EPD. And EPD generates about $900m of distributable cash flow that they KEEP, and they can use that for investments or debt payoff or some combination. Remember in 2008 everyone thought EPD would not be able to roll over their debt and they DID, even though a lot of companies were unable to do so. These guys are good.