AH trading in SXE is quite rare and usually only when there was significant business announcement like eps etc, right at market close.
But today, on total volume of 71k units, less than 10% of the 3-month daily average - and some idiot decides he/she needs to sell 97 units at 4:03 PM for $ 2.09 / unit. They had plenty of opportunities to sell these 97 units for a higher price during normal trading.
Such a day of + 30% will not happen for quite a while because:
1. The institutional investors who have been busy selling SXE, have not returned and probably will not until mid to late August 2016, when the next set of 13F or 13G forms are filed. Let's face it, most of the institutional investors are herd animals - once they see other firms ( who think for themselves ) see value in SXE, then others will jump in.
2. Just looking at the volume over the last couple of weeks and the last few days in particular, we see an occasional uptick on 5,000 unit trade - then the day traders come in and sell into any kind of rally with their 100 to 500 unit trades.
3. We need to see some real positive business news out of the Tres Amigos - such as a new business deal for the AL and MS business that they were touting during the Q1-2016 CC. Until we see some significant business announcement - SXE trading will be dominated by the day traders and their 100 to 500 unit trades.
During the Q1-2016 CC, Bonn had this to say in the 3rd and 4th paragraph.
" We are currently in the final phases of adding several small packages of rich gas to our extended gathering and processing system. Some of this activity is on our Gulf Coast system, where producers are benefiting from the ability to utilize lower-cost vertical wells in the shallower formations.
Additionally, we are seeing some growth opportunities around our Mississippi and Alabama assets. In fact, we are completing the interconnect to a new market this month. "
So, there should be an announcement about the new interconnect in AL and/or MS within the week or so.
Not sure on the actual timing of the " final phases " of additional contracts in the rich gas business.
Well, as one would expect; we lost the support and interest of many institutional investors during Q1-2016.
There was a reduction of 7.8 million units and a total sell out of 6.0 million units with the new unit and add on purchases of just 0.32 million units. Total owned, 3.93 million units
Key takeaways are:
1. Neuberger is completely out with 2.6 million
2. Totally surprising - perhaps - Advisory Research, who had mostly energy MLPs, out at 2.96 million
3. Oppenheimer still in with their 1.73 million units
4.. The third largest holder is BofA - Merrill Lynch with their 393k units, which are most likely really owned by ML clients.
5. That means that our Cajun-Pete with his 650,000 units is in reality the number 3 spot by a long shot. We need to nominate Cajun-Pete to the BOD of SXE.
Here is a summary of the top institutional listing; name, date, total volume, # of add's or deduct's, % change, value in $ 1,000s
OPPENHEIMERFUNDS, INC. 03/31/2016 1,731,229 0 0.00 3,462
ZIMMER PARTNERS, LP 03/31/2016 932,800 (932,800) (50) 1,866
BANK OF AMERICA CORP /DE/ 03/31/2016 392,875 (22,328) (5.38) 786
ROYAL BANK OF CANADA 03/31/2016 285,300 (144,418) (33.61) 571
ADVISORS ASSET MANAGEMENT, INC. 03/31/2016 75,301 (39,153) (34.21) 151
RAYMOND JAMES FINANCIAL SERVICES ADVISORS, INC. 03/31/2016 63,578 63,578 New 127
GSA CAPITAL PARTNERS LLP 03/31/2016 58,588 (18,300) (23.8) 117
SPIRIT OF AMERICA MANAGEMENT CORP/NY 03/31/2016 55,176 (335,789) (85.89) 110
SUSQUEHANNA INTERNATIONAL GROUP, LLP 03/31/2016 50,231 825 1.67 100
STIFEL NICOLAUS & CO INC \MO\ 03/31/2016 50,153 3,787 8.17 100
UBS GROUP AG 03/31/2016 34,442 (15,717) (31.33) 69
PEAK6 INVESTMENTS, L.P. 03/31/2016 31,056 25,430 452.01 62
JANE STREET GROUP, LLC 03/31/2016 27,224 27,224 New 54
WELLS FARGO & COMPANY/MN 03/31/2016 26,738 (16,305) (37.88) 53
CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM 03/31/2016 22,500 (1,500) (6.25) 4
Yesterday was clearly a day trader day. We'll probably continue to have those. Looks like SXE is under occasional accumulation - but why - either some institutional building up a portfolio, or something might be brewing in the background. There needs to be some type of announcement soon re: 1. sale of non-core assets, 2. new loan covenant negotiated with the bank,3. other.
OK, the first 30 minutes of trading, started at 9:32:02 vs. the normal 09:30 or so. Looks like there was a trade imbalance, the MM had to find enough sellers to fill that 24,000 unit order at 2.35. All told there were 109 trades for a cumulative volume of 135,039 units.
Then, let's look at how the trading closed out during the last 30 minutes of trading. Like before in the morning, there are trade imbalances so trading in that bracket started 15:34:35 with 1500 units at 2.189, total volume during this bracket was 8,741 units with 16 trades.
Clearly, one can see that the big money moved in during the morning and the day traders finished out the day.
Trading in SXE in AH market is very rare. Today someone really wanted in at a price of 2.29, much higher than at any time during normal trading.
Just two trades; 820 units traded:
After Hours Time (ET) After Hours Price After Hours Share Volume
17:40 $ 2.29 High 450
16:08 $ 2.29 370
If this driven by the buyer, there were plenty of opportunities during normal trading at a lower cost.
If this was driven by a seller, makes no sense as the bid/ask was 2.10 / 2.20
That may be what they told you - but the SEC filings say otherwise. They signed an employment contract on March 17, 2016 that expires on Nov 1, 2016. If they truly were going to be around long term, there would have been either a multi-year contract. The fact that they beefed up their bonus pay to multiples of their normal salary, makes them contract workers.
Actually quite simple. Sell the AL and MS businesses for $ 80 million to $ 90 million. Pay down the debt with the proceeds. Then, they have the $ 38.2 million of unused equity cure from Holdings.
Presto, problem solved, no need to get special permission from the bank, no more than they had to do last year.
OK, tomorrow, 10-May-2016, the Tres Amigos will be hosting the Q1-2016 CC. The big question will be are they going to be as dull and uninformative as they were during the Q4-2015 CC, just a few weeks ago - or are they going to talk about a positive future.
1. Our closes peers are CEQP, DPM, and TRGP. Upon reading their Q1-2016 CC, there were discussions about a better future due to market supply constraints in ethane and other NGLs, especially in the Gulf Coast.
2. These peers actually talked about 2017, something Bonn et al have not. Could that be because they will not be around past Nov 1, 2016.
3. They should be talking about selling non-core assets, specifically the AL and MS businesses.
4. And most importantly they should be talking about restoring distributions, though clearly at a more modest rate, such #$%$ 0.10 / quarter. That in itself ought not be a problem as the next distribution cycle will not start till August - well after the first half is done.
Well, time will tell if Bonn et al can actually muster up the courage to deliver a positive image of the future, like they did last year.
" I wonder if they communicate with EIG Energy Partners "
To the extent that EIG plus Tailwater and the bank, own about 67% of the total voting units of SXE - then yes, absolutely are they communicating with them. Let's face it the Tres Amigos are actually employees of the GP, which controls SXE.
Tough to say. After having read the CC transcript of TRGP and CEQP, one would expect some enthusiasm out of the Tres Amigos. But I am not holding my breath.
This could be a situation whereby the PE firms and the bank, would have hired an independent agent to sell Holdings and SXE and once the deal is closed bring the Tres Amigos int to execute the deal.
These are really two different issues:
NGLs are the feed stock for many chemical processes. But to answer your question, there is a big ethane cracker under construction in Corpus, actually Ingleside, by OxyChem and MexiChem and that plant is supposed to come on line in 2017.
Then, there is the large LNG liquefaction plant being built by Cheniere and the first train of which is supposed to come on line in 2018.
Agreed, hopefully they will have some pleasant news come Tuesday morning - but - ever since they took a full week between filing the 10K and the follow-up CC, where they basically told us nothing, then it is clear that the Tres Amigos really do not give a rip.
Just think, they are going to have PR early on Tuesday morning May 10, 2016 and then have the follow-up CC, later that morning. Given that it took them a week last time with absolutely no news, then how can anyone expect them to do better than that in just a few hours.
Of course, the absolutely anemic daily volume this week and today in particular, do not help. Just look at today's trading 171k, what a mess.
You may want to go back and do more research on MLPs, as in master limited partnerships. They are on of those rigged system, whereas the General Partner, GP, can and usually does, only own 1% or 2% of the LP - but they get to run the whole show. As MLPs go, there is in fact very little if any fiduciary responsibility to the limited partners, hence they are " limited partners ".
I would not put much faith into that. That is most likely a case of one or more bank customer(s) with a brokerage account at TDB. Next, the point of these Form 13 filings is that these institutionals have to show what and how many shares / units they hold themselves or for others at the end of each quarter.
Whether this / these bank customers still own those 19,000 units is unknown and for that matter truly irrelevant as it is such a small position.
The AL and MS businesses are clearly non-core. EBITDA less than 8% of next year's EBITDA total but yet, due to the low risk, we can get a high multiple. Plus, we need some serious debt reduction programs and selling AL and MS is a very clear way to get there. In addition, the GS&A costs ought to go down for not having to deal with two state regulatory agencies for energy, environment, taxes etc.
So John was able to ascertain from IR that the AL and MS business has an annual EBITDA of just $ 8 million. Since that is less than the already low $ 83.6 million for 2016 - AND - since this is clearly a very low risk business it should sell for a better multiple, let's say 10 - 12 x EBITDA. We should be able to get close to $ 90 million for that. Take that $ 90 million and pay down the debt, term or revolver and get the total debt down. That should get us down to covenant compliance much faster.