Value in Numbers
Long only, value, dividend investing

High-Yielding StoneMor's Value Masked By GAAP Reporting Complexities

Overview

Paraphrasing and applying Winston Churchill's famous 1939 quote to StoneMor Partners LP (NASDAQ:STON) financials, "they are a riddle wrapped in a mystery inside an enigma." The riddle, the mystery and the enigma; high MLP distributions against reported GAAP financial loses.

There has been several articles over the last few years about Stonemor's financial "riddle" where the authors have misunderstood or misstated their financials, and implied significant risk to the distribution, resulting in stock selloffs. Investors who understand the impact of timing on GAAP revenue recognition and cash flows for Stonemor's business model have been able to pick up a high-yielding stock at a discount. However, I suspect that many investors who acquired the stock for regular income,...

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