TOO's market cap is around expected 2017-18 EBITDA, that is insanely low. The market is pricing in a complete collapse in offshore drilling which isn't happening even at today's prices.
They have close to 3x coverage on 2017 cash flow. I'd say the dist is pretty save and well covered. Oh, they also have low debt ratios compared to most other MLPs and so are well positioned to grow when the market turns and the timing is right.
Exactly, APLP is around 90% gas and 10% oil. NatGas production is only going up with LNG exports and new pipelines to mexico. We are also seeing continuous new IP demand due to north america's low cost. APLP is the market leader in natgas compression and will capture most of this business.
You might be waiting awhile. Even a year ago when oil was in the $50 range ETE was trading 300% higher than it is today. It was the massive debt burden of the deal that crashed ETE, without that overhang this stock will rebound nicely.
ETE put out a press release saying they rejected Williams tax proposals for the deal. This means ETE is serious about not closing the deal and letting the time frame to close pass.
Of course this would put the whole thing into a massive law suit by Williams for damages, but ETE is probably banking on a settlement that works out much better than the deal going through.
If the deal falls apart ETE is $20 easy.
Any short term traders who got in at the $2-3 low are probably exiting now that TOO has had a nice run that seems to have stalled out.
Once that selling is done momentum can continue to the upside. TOO is still trading at absurdly low EV to 2017/18/19 EBITDA numbers.
Well their growth has stopped, at these prices no one is initiating new projects. But that is fine, TOO has new projects coming online through 2017 and then will spend a year or two fixing the balance sheet. By they time that is done prices will likely have received and TOO will be in a better position to capitalize on that and start a new round of capex investment.
All that capex is going towards large projects that grow cash flow. In a few years TOO will be throwing off more than $3 a unit. They will use that to pay down debt and then resume increased distributions, by the time we get there the stock will be much higher. This is a buy and wait play because you can't predict when the market will move but know it will. Oh and you still are paided a very secure and nice yield while you wait.
The $1000 UBTI limit will not hit you with 1000 shares. Capital gains and distributions do not count toward the $1000 limit, only unearned income as reported on the K-1 does. ETE will show you as having negative UBTI for years....
$20 very quickly if it is, otherwise we're back below $10
I've followed Wells' research for years, what I've learned is they essentially just repeat what management says and rely on management for all their numbers, there is no independent thought. The above is simply what NGL management forecasted.
The problem with this is when management is widely optimistic, just look at what Wells' forward estimates were this Jan. They were predicting high $3.xx DCF for FY2017 and $4.xx DCF for FY2018. Wells was off by almost 50%. Frankly after following them for a long time, I've learned to just use them as a consolidated source of what management says, and then to do my own research in selected areas that look interesting. But isn't that what a paid research analyst is suppose to do?
It's not a trade, it is an absurdly low entry point for a long term holding. It shows how ridiculous the price became (and still is) for a stable payout. Look across various sectors from BDCs, REITs, etc and nothing this stable is available at yields 6%, let alone 20%. Everyone here was bashing ETP at the bottom not understanding the cash flow stability it offers.
In addition to PDPYF (which is already up) BIREF looks to be a fairly similar story. Strong operational focus with declining costs, matched with massive growing reserves and room to ramp production when it makes sense. BIREF has opportunities for multi layers to their horizontal drilling program, meaning they can drill new horizontal lines from the same vertical hole over the same location. This 2nd or 3rd run is obviously very affordable as much of the infrastructure is already in place.
At this point PDPYF, BIREF, Granite Oil, and BTE are a reasonable but sizable portion of my holdings, will wait for the eventual 2018/19 recovery now...
Starting to move up. I too am in this for the long haul. Just wait till the eventual energy recovery and $90 oil with $5 gas, the FCF in 2019 with that will be amazing and more than my purchase price. Only put 3% in but it's my largest E&P play, which I put in more.
NGL today offers a super secure yield of 11% with guaranteed dist growth, this is still a steal and I'm not adding only because of the size of my position. What else can you buy with this income stream? By the time you will want to get in again we'll be over $30
I think the IDRs start at 1.56, if so that means management fully cut the IDRs while preserving the distribution as much as possible for unit holders. I like that and will take it.
We are looking at 14% yield at today's closing price with expected growth to the mid 20% range if you assume just their current growth projects and future raises to the 1.3-1.5x coverage range.
On top of this NGL is exposed to oil prices, we learned this through the current cycle. NGL's forecasted EBITDA numbers assume today's oil prices. When oil hits $80 again in 2 years NGL's cash flow will increase as well, that brings NGL to an expected 30% yield in a few years time.
All with strong coverage and a solid balance sheet that is paying down debt, plus extra money for funding growth into the next cycle.
I don't know where we end tomorrow, but it will still be a buy at the end of the day.
Essentially KMI is no longer an MLP but a high growth dividend aristocrat, I can live with that. BTW their 4x coverage will fund quite a lot of growth