Seeking Alpha

Darren McCammon's  Instablog

Darren McCammon
Send Message
Darren owns ProActive Financial LLC where he provides Financial Planning and Analysis consulting services. In addition to these consulting services, he also manages family investment accounts. Darren's education includes a Bachelors in Economics, an MBA, and a Certificate in Personal Financial... More
My blog:
Darren McCammon's Instablog
View Darren McCammon's Instablogs on:
  • Investment Quote Jumble

    "What do you call a stock that is down 90%? A stock that was down 80% and got cut in half." -David Einhorn

    "Experience is what you get when you didn't get what you wanted. Wisdom is rarely learned, except through experience." -Randy Puasch & Confuscius respectively

    "An investment in knowledge pays the best interest. Formal education will make you a living; self-education will make you a fortune. " -Benjamin Franklin & Jim Rohn respectively

    "In investing, what is comfortable is rarely profitable. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful. But also know what you own, why you own it. Set a position size limit, lest the market set one for you" - Robert Arnott, Warren Buffet, & Peter Lynch respectively

    "I love money. I love everything about it. I bought some pretty good stuff: got me a $300 pair of socks, a fur sink, an electric dog polisher, a gasoline powered turtleneck sweater. And, of course, I bought some dumb stuff, too….Too many people spend money they earned, to buy things they don't want, to impress people that they don't like. Financial peace is learning to live on less than you make, so you can give money back and have money to invest. Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound and six, result misery." - Steve Martin, Will Rodgers, Dave Ramsey and Charles Dickens respectively

    Tags: quotes
    Aug 28 2:55 PM | Link | 1 Comment
  • A Grexit Will Ultimately Make The Euro Stronger

    Over the long run a Grexit is more likely to strengthen the Euro than weaken it. Think about it, who would you rather have in your Euro, Switzerland or Greece? When the Swiss decoupled their Franc from the Euro they basically said, we aren't going to be tied to a currency which is being debased. The leadership of the EU therefore was forced to face something that long should have been obvious, you have to police membership in the Euro or it will be abused. If you don't some countries, for example Greece, will grant citizens benefits and not collect taxes; effectively living beyond there means and using debt to fund the difference. This debases the common currency. In effect Germany funds reckless Greek fiscal policy. This in turn causes countries with more fiscal responsibility, Switzerland, UK, etc., to further distance themselves from the Euro.

    This can not be tolerated without ultimately causing the destruction of the currency. Over the long run a Grexit provides necessary policing for that currency. It sends a message to Spain, Portugal,Italy, etc. that their are consequences. That they need to at least stop digging their own particular holes quite as vigorously or they too will follow Greece. It also sends a message to the more responsible countries: Germany, UK, Switzerland, Netherlands, etc. that membership in the Euro would not necessarily be signing a death warrant of continuous subsidies to southern neighbors. Yes, a Grexit is a break in the union, a break that will hurt in the short run but ultimately make the Euro stronger.

    Tags: Grexit, currency
    Jul 08 1:54 PM | Link | 12 Comments
  • CorEnergy Infrastructure Is A Buy At These Prices

    CorEnergy Infrastructure Trust (NYSE:CORR) primarily owns midstream and downstream U.S. energy infrastructure assets subject to long-term triple net participating leases with energy companies. The assets include pipelines, storage tanks, transmission lines and gathering systems.

    (click to enlarge)

    (click to enlarge)

    CORR has been well covered on Seeking Alpha. There is little I could add. So for a more thorough outline of what they do, their valuation, competition, strengths, weaknesses, etc. I suggest you read one or all of the articles by these fine authors:

    1. Don't Like MLPs, How About A Pipeline REIT?
    2. First-Quarter REIT Underdog Update
    3. CorEnergy Is Substantially Undervalued With Upside Of 75% And An 8.5% Yield
    4. CorEnergy Infrastructure Trust: The Energy REIT You've Always Wanted
    5. CorEnergy: 4 Different Insiders Have Purchased Shares This Year

    Though well covered in Seeking Alpha, CORR is less well known in the rest of the investing world than the big boys: Enterprise Products Partners (NYSE:EPD), Kinder Morgan (NYSE:KMI), Plains All American Pipeline (NYSE:PAA), Magellan Midstream Partners (NYSE:MMP) or Energy Transfer Partners (NYSE:ETP). This is because it is much smaller, less diversified and thus riskier. It is also because it chose to incorporate as a REIT instead of an MLP. As a REIT, distributions from CORR are fully taxable at one's marginal rate. Thus it is probably best held in a tax protected account like an IRA or 401k. However, at current prices the expected forward yield is approximately 9% vs. the better followed MLPs which pay something closer to half that.

    Source: June 2015, REITWeek Presentation

    This high yield is not because CORR is paying yield in excess of cash flow. Last quarters dividend of 13.5¢ (a 3.8% increase from the previous dividend) was fully covered by their 15¢ in AFFO. Furthermore, one can expect that dividend to be raised again to about 9% based on current price, thanks to their just announced purchase of the GIGs pipeline gathering system from EXXI. However, in the short term this purchase also requires CORR do a large issuance of new shares (share count will increase about 25%). This impending issuance is currently weighing on price. It represents an opportunity to buy low.

    CORR at $6.08 represents a way to capture a 9% dividend. One which is likely to continue to grow as CORR continues to buy basic core infrastructure assets from troubled oil exploration and production firms. In its presentations it has stated a goal of growing the dividend by 3-5% annually. I suspect it may exceed that goal for the next few years as low oil prices continue to drive a need for oil exploration and production companies to monetize some of their assets. However, the more conservative investor may consider taking a somewhat smaller than normal position in CORR due to its current concentration in just a few midstream assets and the counterparties in its triple net leases currently being in distress. The investor will hopefully have future opportunities to add as future purchases and issuances cause temporary pressure on price and result in similar opportunities. Or CORR may get discovered and you may never see this advantageous of pricing again. It's up to each individual to decide for themselves.

    Long term I expect the concentration risk in CORR to slowly disappear as it continues to grow. Concurrently, I expect it to be added to indexes, gain analyst coverage and start to be owned by funds and institutions. Also one day oil prices may rise and accretive purchases of core infrastructure assets may not be as easy to come by. However for now, CORR is in a sweet spot. This little snake should continue to open it's jaws wide and swallow whatever it reasonably (and accretively) can.

    Jun 23 3:59 PM | Link | 8 Comments
Full index of posts »
Latest Followers

StockTalks

  • Thank you marginhunt.com for choosing my $CPLP article as a best investment idea of the day: http://bit.ly/1PDZ0dl
    Aug 21, 2015
  • $RICK may be using market weakness to buy back some shares the last couple days.
    Aug 21, 2015
  • Between long: $RICK, $CPLP, $ERI and some shorts, I'm actually having a good day!
    Aug 21, 2015
More »

Latest Comments


Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.