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
That debt has paid for assets under construction that come online in 6 months, assets which are expected to generate $160 in DCF. You have to put that incremental cash into the calculation if you are going to add the debt. Also that $450M number is what you get with the worst possible market conditions, the same assets will generate a lot more in 2017/18 after oil recovers.
I am in the same position, was #$%$ when sold out to gs for $20 and then more so when it crashed to $9. Loaded up to make ebix my largest position by far at the bottom and held long. But then started selling a year and a half ago, by $40 I was down to %20 of my original very large stake.
Am thinking of finally closing the position, overall could have made a lot more if I held to now but still did quite well. And given this stocks history another buying opportunity could be around the corner....
Exactly, OPEC is only 1/3 of the market and will now run at max production. That means oil prices will be determined by the rest of the market producing firms around the world. This is a new environment that we haven't had before.
It will mean lower lows to oil prices since OPEC will no longer support prices, but also higher highs since OPEC will not have spare capacity to turn on during shortages.
We are going to see a cyclical 6-8 year oil price for now on. Play the cycle and you will do well. Most people will just watch CNBC and Cramer bash oil when it is already at the bottom and praise oil when it is already at the top.
Wait until oil recovers in a year and ETE starts to grow the dist again. It will easily pass its ATH and hit $40 in two years. Wish I bought more at $4, only doubled up there should have quadrupled up
Most of their debt is in the form of bonds which are not due for years. The banks are not involved in that and bondholders have little say.
The banks only control the credit line, which is very secure, no issues there from a banker perspective.
Once oil gets back to the $60 range (which it will this year) NGL is going to look like a steal at these prices. I think they will make it through without ever cutting the distribution.