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AlanHHI  

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  • Memorial Production Partners - Time To Take Advantage Of The Recent Secondary? [View article]
    Griffin you wouldn't be complaining and neither would I, but plenty of analysts on the conference call would be asking something like "couldn't you increase distributions faster if you didn't hedge out all your future upside". I listened to plenty of upstream MLP conference calls where questions like that were asked.
    Apr 10, 2015. 04:12 PM | 1 Like Like |Link to Comment
  • Memorial Production Partners - Time To Take Advantage Of The Recent Secondary? [View article]
    It's important to understand that the MEMP hedging policy comes (or at least came) with a cost. Before the drop in oil's price at the beginning of July of 2014 upstream MLPs that were relatively well hedged underperformed. Their peers could take advantage of the increasing price of oil to continue to increase their distributions.
    Now the tide has turned and MEMP looks like geniuses. In fact, they were merely deliberately limiting their upside in order to more safely promise their distributions. If the price of oil had remained at $100 the same analysts that were congratulating them for the hedging would have been complaining that their hedging was keep down their returns.
    Apr 9, 2015. 02:14 PM | 6 Likes Like |Link to Comment
  • Memorial Production Partners - Time To Take Advantage Of The Recent Secondary? [View article]
    I disagree completely. The only thing that is happening is that a lot of units are being offered for sale at once. No additional units are being created. I too bought more units this morning. I'm hoping to see the units revert to their old price of about 17.25 within a week. After all, 4 million units have traded hands already today, and only 4.6 million are being offered for sale immediately, plus a possible 550K within 30 days.
    Once again, please keep in mind that the total number of units will stay the same (about 84.1 million in the last quarter report).
    Apr 9, 2015. 02:08 PM | 1 Like Like |Link to Comment
  • Memorial Production Partners: Buy The Dip? [View article]
    Most of the comments seem to imply that something terrible is going on with this non-dilutive secondary. I see it differently. Secondaries are a fact of life with MLPs, and particularly with upstream MLPs. My rule has always been to have enough capacity to buy some when the inevitable secondary happens. I've traced out many of these and usually the secondary has been fully bought and the price has reverted to the old price within a week. Thus, I bought some shares this morning at 16.45, and later this morning for another account at 16.62.
    It's 2:00 pm now and almost 4 million shares have traded hands, vs about 600K on an average day. To me this means the entire 4.6 million secondary will have been placed by the end of tomorrow. I'm hoping to see 17.25 within a week, at which point I will probably sell some or all of the shares I bought today.
    Apr 9, 2015. 02:00 PM | 3 Likes Like |Link to Comment
  • Memorial Production Partners: Buy The Dip? [View article]
    BBEP is a mess. They cut their distribution twice in three months. That by itself makes me question whether they will eliminate the distribution for a time. In addition, I'm really shocked that their preferred is as high as it is.
    Apr 7, 2015. 12:47 PM | 1 Like Like |Link to Comment
  • Memorial Production Partners: Buy The Dip? [View article]
    Albert, great article as usual. I agree with bayou that the market is pricing in a cut. I just feel that the market is wrong, and I would bet you share this feeling.
    I'm hopeful that MEMP will again tell the analysts that they are not going to cut the distribution in the first quarter conference call. I figure that once the market believes the $2.20 distribution is safe then the shares will get to at least 22. In the meantime I will wait and collect my 0.55 a quarter.
    FTR, I'm maxed out on MEMP. I will probably have to sell a small portion of my shares on the way to 22 as MEMP becomes to large a part of my portfolio.
    Apr 7, 2015. 12:40 PM | 1 Like Like |Link to Comment
  • BreitBurn Energy Partners: Short-Term Pain For Long-Term Gains [View article]
    When I look at the middle east I see Saudi Arabia vowing to crush the economy of their mortal enemy Iran. They can, and are, doing this by pumping their oil at or close to their maximum rate to keep the price down. I believe the middle east situation actually keeps oil prices down, as Saudi's interest in crippling Iran's economy than their interest in maximizing their own oil revenue.
    I used to think that Saudi needed to keep the price of oil up since they can balance their budget with oil less than about $93 a barrel. Since then, I've learned that the Saudi's have years of reserves to allow them to run deficits as they work to cripple Iran's economy. This will also bankrupt a few shale oil companies in North American, but that's a bonus for the Saudis.
    Apr 1, 2015. 08:20 AM | 4 Likes Like |Link to Comment
  • BreitBurn Energy Partners: It Could Have Been Worse [View article]
    I don't know which elements of "that list" you mean are worse. VNRCP, as well as the other VNR preferred have almost fully recovered to 25, which make sense since they have demonstrated that their reduced common is secure. Remember, VNR, along with almost everyone else, can't make any common distribution without being fully paid up on the preferreds. Similarly, LGCYO has said more than once they will cut their common distribution if needed to make the common secure. The fact that LGCY management feels they can make the common secure makes the preferred very secure.
    As for GDPpC, those preferreds is probably not more secure as BBEP, but it's selling for less that 12. GDPpC just announced another distribution with an ex-date of 3/11. That's a spec I'm will to try with a small amount of money.
    Mar 8, 2015. 10:21 AM | Likes Like |Link to Comment
  • Legacy Reserves Rolls The Dice, Betting On Higher Energy Prices Sooner Rather Than Later [View article]
    Griffin, you comment indicates that LGCY can't cut their distribution going forward. They can, and have announced that the distribution policy is under review. As the author notes above, LGCY has prepared the market for a distribution cut, and a supportable cut of 50% or less would probably increase the price of the stock.
    Mar 8, 2015. 10:05 AM | 1 Like Like |Link to Comment
  • Vanguard Natural Resources: Buying When Blood Is In The Streets? [View article]
    I bought a tiny amount (less than 0.5% of the portfolio) at 12, where the yield on the current distribution is 20.2%. I'm waiting to see the actual distribution cut, and how they support it, before I buy any more.
    That said, if the price gets down to 11, I may stick another toe in the water.
    Mar 5, 2015. 02:51 PM | Likes Like |Link to Comment
  • BreitBurn Energy Partners: It Could Have Been Worse [View article]
    I've never cared about the EPS numbers for MLPs. To me it's all about the DCF/ unit and the coverage ratio. If the MLP is collecting enough cash to pass through their distribution I've never worried about the EPS. Is this wrong?
    Mar 5, 2015. 02:47 PM | 1 Like Like |Link to Comment
  • BreitBurn Energy Partners: It Could Have Been Worse [View article]
    Personally I'm astounded that the preferred stock (BBEPP) has held up so well. This is partly because I caved on BBEPP at 18.50 and have not bought it back. I've chosen to invest in LGCYO, VNRCP, and now a small amount of GDPpC (a spec I bought at 8.38 last week; I think of it as as equity, not fixed income) and MHRpD. So far so good on these four.
    I think it's important to note that BBEP make their forecast of 1.35x coverage assuming WTI would average $60, and Brent would average $65, for 2015. I'd want to see these assumptions changed to at least current strip pricing before I put any money in either the common or preferred units of BBEP.
    Mar 5, 2015. 11:48 AM | 2 Likes Like |Link to Comment
  • Memorial Production Partners: 2015 Should Be A Strong Year [View article]
    I'm taking a small (0.5% of the portfolio) flyer on GDP-C, which yields over 30%. I'm treating it as a stock, not a preferred. The ex-date on last quarter's 0.625 divvy was 11/26, so hopefully we'll hear about the next dividend, which will be paid out on 3/15, any day now.
    Truth is that preferred divvies must be made up before common dividends can be paid (not that they are paying common dividends), so I'm not sure how much the preferred stock will go down from it's current value of 8 even if the board decides not to pay the dividend when due.
    Feb 26, 2015. 02:55 PM | Likes Like |Link to Comment
  • Memorial Production Partners: 2015 Should Be A Strong Year [View article]
    I'm delighted to report that I have the same problem. I'll keep dribbling out shares as needed until the price gets up to about 23.
    Meanwhile, for those of you who haven't backed up the truck yet MEMP under 19 is still a steal.
    Feb 26, 2015. 02:30 PM | 1 Like Like |Link to Comment
  • Memorial Production Partners: 2015 Should Be A Strong Year [View article]
    That was a very good trade since MMEP is currently trading for 18.27 while VNR has dropped to 16.85. I've been surprised by how well VNR has held up since their distribution cut. I'm using VNR as the measure of where an upstream MLP should trade, and they're yielding a little less than 8.5%. Based on that I feel that MEMP should yield no more than 9.5%, which puts them at an eventual $23. Meanwhile, I'll collect 0.55 a quarter while I wait.
    Feb 26, 2015. 02:24 PM | 2 Likes Like |Link to Comment
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