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Philip Trinder  

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  • 3 Good Reasons To Sell BP Prudhoe Bay Royalty Trust [View article]
    Always Dubious,

    Thanks and no, I have no in at BP. I've been posting my model estimates on my website and been continuing to try and improve its accuracy since I pulled together a model back in January of 2014.

    Here's my post from earlier today: http://bit.ly/1KHNbU4

    All BPT related posts: http://bit.ly/1KHNcro

    I took a flyer on some BPT Call Options so it will be interesting to see if the large distribution increase quarter over quarter leads to some yield hunting buying interest (and maybe a little short covering), guess we'll see how it trades as the news gets absorbed by the market.

    Best Regards,
    Phil
    Jul 6, 2015. 04:42 PM | Likes Like |Link to Comment
  • 3 Good Reasons To Sell BP Prudhoe Bay Royalty Trust [View article]
    BPT just announced a distribution of $1.4723774.

    Production was 86,481 (I had estimated 87,250).
    Jul 6, 2015. 04:19 PM | Likes Like |Link to Comment
  • 3 Good Reasons To Sell BP Prudhoe Bay Royalty Trust [View article]
    Pablomike,

    Yes, we might as well, for all the accuracy bragging rights about BPT at SA. ;-)

    Here's the current list:

    Trinder $1.4655
    Always Dubious: $1.35
    Pablomike: $1.28

    Best Regards,
    Phil
    Jul 6, 2015. 03:33 PM | Likes Like |Link to Comment
  • 3 Good Reasons To Sell BP Prudhoe Bay Royalty Trust [View article]
    Marilyn,

    My estimate is $1.4655. I think my main source of margin of error will come from the actual royalty production versus my estimate.

    If anyone else has an estimate let's get them posted!

    Best Regards,
    Phil
    Jul 6, 2015. 03:05 PM | Likes Like |Link to Comment
  • This High-Dividend Stock Yields 8.5% Plus, Is Beating The Market And May Get Bought Out In 2015 [View article]
    DDS,

    Your takeover calculation for OCIR LP Units is missing some materially important details.

    1. The estimated $128 million of EBITDA is for OCI Wyoming, LP which is only 51% owned by OCIR. You can see the ownership spit in the org chart from the IPO Prospectus here: http://1.usa.gov/1JHl3jZ

    2. The Enterprise Value for OCIR then needs to be adjusted down by the net debt at OCIR which was $108.6 million as of March 31. 10-Q: http://1.usa.gov/1JHl2fG

    3. The equity value for the OCIR LP units also needs to take into account that the GP position is worth more than the LP units so the GP equity value needs to be estimated and subtracted before trying to back into an effective price per LP unit.

    Based on those key changes and an assumed 20 times multiple for the GP interest the estimated "Potential Buyout Price / Unit" is more in the $23.62 to $24.62 range instead of the $57.57 to $59.57 range that you calculated.

    Best Regards,
    Phil
    Jul 5, 2015. 01:08 PM | 5 Likes Like |Link to Comment
  • New IRS Rules Could Eliminate SunCoke's MLP Status [View article]
    All,

    Suncoke Energy just released a statement on Proposed New IRS Regulations and Submit Comment Letter: http://bit.ly/1ekWxYH

    Best Regards,
    Phil
    Jun 16, 2015. 02:05 PM | 1 Like Like |Link to Comment
  • New IRS Rules Could Eliminate SunCoke's MLP Status [View article]
    Richard,

    You make this statement:

    "In addition, because SunCoke had not received a PLR from the IRS for coke production, it WOULD NOT get the 10-year extension for existing activities, as did Westlake."

    I disagree with your statement, even IF SXCP's coke production is ruled as non-qualifying it WOULD still be grandfathered in for the 10-year extension ("Transition Period") based on the following:

    "(ii) A partnership may treat income from an activity as qualifying income during the Transition Period if:

    (A) The partnership received a private letter ruling from the IRS holding that the income from that activity is qualifying income;

    (B) Prior to May 6, 2015, the partnership was publicly traded, engaged in the activity, and treated the activity as giving rise to qualifying income under section 7704(d)(1)(E), and that income was qualifying income under the statute as reasonably interpreted prior to the issuance of these proposed regulations;"

    SXCP's IPO priced on January 17, 2013 and it has treated its activity as qualifying income under section 7704(d)(1)(E) and the income was reasonably interpreted prior to the issuance of the new proposed regulations (as evidenced by the legal opinion provided for the IPO even though it was not a Private Letter Ruling form the IRS), so it meets all the requirements shown above in proposed Section 7704-4(f)(ii)(B) and actually WOULD get the 10-year Transition Period.

    After seeing the proposed Section 7704-4(f)(ii)(B) language do you agree with my interpretation?

    Best Regards,
    Phil
    Jun 16, 2015. 12:28 PM | Likes Like |Link to Comment
  • Use The Current 'Fiasco' As An Entry Point For Plains All American [View article]
    user1416,

    They are talking about the publicly traded units/shares of PAGP, so they are stating that people who own PAGP will receive distributions/dividends that will be treated as "return of capital" for tax purposes and that those distributions/dividends will not be taxable as they are received.

    The reason this tax treatment is happening is explained on page 114 of that same presentation. Also the concept is touched on in this Alerian blog posting from today: http://bit.ly/1Igvfd4

    The basic concept of the chart of page 114 is that PAGP holders won't have to pay any taxes on the distributions/dividends they receive until the year 2021 if PAGP grows its distributions/dividends over that time frame at 20% per annum. Alternatively if PAGP grows its distributions/dividends at 15% per annum going forwards then PAGP holders won't have to pay any taxes on the distributions/dividends they receive until the year 2023.

    Receiving a rapidly growing distribution stream that won't create any taxable income over the next 6 to 8 years (or perhaps even longer as additional privately held AAP units get converted "up" into PAGP publicly traded shares) sounds pretty good to me.

    Best Regards,
    Phil
    Jun 15, 2015. 05:14 PM | Likes Like |Link to Comment
  • Use The Current 'Fiasco' As An Entry Point For Plains All American [View article]
    ATrautmann,

    I do not expect PAA to buy out its GP in 2016. They discussed why they wouldn't in their Analyst Day in New York yesterday. Here's a link to the webcast and presentation: http://bit.ly/1eTpxH2

    In the final Q&A they responded to a question about a possible buyout of the GP and explained why it currently didn't make sense for the PAA unitholders (and while anything is possible, it still seems very unlikely).

    Best Regards,
    Phil
    Jun 5, 2015. 11:38 AM | 1 Like Like |Link to Comment
  • Capital Products Partners LP Still A Strong Buy [View article]
    Emily,

    Based on the data for energy related MLPs that provide a 1099-DIV, I disagree with this statement:

    "... those issuing 1099 tend to issue a greater share of distribution income classified as ROCs."

    The energy related MLPs that send 1099-DIVs instead of K-1s are generally speaking the "marine" subsector. Here are a few of them and their recent or estimated tax treatment:

    CPLP - 76.63% Return of Capital, Source: http://bit.ly/1allcd0

    DLNG - 0% Return of Capital, Source: http://bit.ly/1FXpwdY

    GLOP - 30% Return of Capital, Source: http://bit.ly/1FXpwe2 (see pages 20-21 of their IPO prospectus)

    GMLP - ~26% Return of Capital, Source: http://bit.ly/1FXpwul

    HMLP - 10% Return of Capital, Source: http://1.usa.gov/1FXpwup (See bottom of page 17 of IPO prospectus)

    VTTI - 45% Return of Capital, Source: http://1.usa.gov/1FXpwut (See bottom of page 17 of IPO prospectus) [Technically I view VTTI as a Terminal & Storage MLP so it's not Marine, but it's still within what I view as the "energy related MLP universe"]

    So there are at least 5 examples out of the dozen or so Energy Related MLPs that send 1099-DIV tax forms that are substantially below 80% Return of Capital tax treatment for their distributions / dividends. The group of 12 or so that I am referring to excludes the General Partners (some of which are C-Corp entities).

    I too have found that various privately held partnerships are really bad at getting me my K-1s on time; however, the point I was making was that the publicly traded energy MLPs have been good at getting their K-1s out to investors before the April 15 filing deadline. In fact PWC prepares K-1s for a large number of the publicly traded energy MLPs and has a website set-up to allow investors to download their K-1s as soon as they are ready.

    Here is the website: http://bit.ly/1FXpume

    If you go on that website you can see the actual dates that all of those K-1s were available for investors. The three latest energy related K-1s were NSLP available on April 3, ETE available on March 27, and OCIP available on March 19 (again I am excluding any funds or financial partnerships, etc. and only discussing the energy related publicly traded MLP universe). Additionally other energy related MLPs that don't use PWC are also set-up to allow K-1 downloads.

    Best Regards,
    Phil
    Jun 4, 2015. 05:40 PM | Likes Like |Link to Comment
  • PennTex Midstream Partners IPO Promises Little Excitement [View article]
    APBK Capital,

    You may want to reconsider your peer group as the MLPs you have used are involved in a different space within the broad "midstream" universe of MLPs. PTXP is more of a "Gathering & Processing MLP" so the closer peer group you may want to look at could include:

    AMID
    AZUR
    CNNX
    MEP
    QEPM
    RMP
    SXE

    Also the data in your Valuation Table has some errors, i.e. PAA is trading around $46 (not $24).

    Best Regards,
    Phil
    Jun 4, 2015. 03:16 PM | 2 Likes Like |Link to Comment
  • Capital Products Partners LP Still A Strong Buy [View article]
    Emily,

    In your comment you make this statement:

    "MLP investors often do not receive them [K-1s] until a month or two post-April 15 (the tax deadline), requiring they file for an extension."

    Do you have any data source to support that statement?

    I have found that all of the publicly traded MLPs that I have ever owned have always sent me my K-1s in February and March. I have never received a K-1 from a publicly traded MLP after the April 15 filing deadline. If anyone has any examples of publicly traded MLPs that sent them a K-1 AFTER April 15 please post those tickers/names in a comment, thanks.

    You also make this statement:

    "- K-1s must be filed every year, so the maximum tax deferral period here is only through April 15 (or whenever the investor files) when tax returns come due. This is in contrast to the lengthier deferral period with ROC treatment, enabling taxes to be deferred until units are sold, which could be years later and contain tax savings due to the compound income on deferred taxes that fully offset the tax bill."

    You seem to imply that K-1 investments do not also receive some "return of capital" tax treatment, if so you are incorrect. The K-1 tax forms also essentially include a typically large portion of "return of capital" tax treatment for the flow through of some of the expenses to the "partner" (i.e. depreciation), which then reduces the Adjusted Tax Basis of the person's MLP investment. Some of the K-1s have enough flow through "return of capital" tax treatment to cover ~80% of the cash distributions received (some are even higher), so the investor may only end up paying ordinary income taxes on "income" that is ~20% of the cash distribution they received in the tax year.

    This lowering of the Adjusted Tax Basis is then effectively a deferred tax item until the MLP units are sold. The Adjusted Tax Basis can eventually hit zero after which time the allocated "return OF capital" items are essentially considered a "return ON capital" (which actually makes some logical sense since the investor has already had all of their initial "capital" returned) and the investor is supposed to pay capital gains taxes on that portion thereafter.

    These quick points are barely scratching the surface on the complexities of K-1 investments, so I do completely agree with your point that CPLP is making it easier for investors by electing to be taxed as a C-Corp and thus sending a 1099-DIV instead of a K-1. So from a tax perspective I view CPLP as a "C-Corp" since it is handled like any other C-Corp at tax time and can also be held in tax advantaged accounts without worrying about UBTI.

    Best Regards,
    Phil
    Jun 3, 2015. 03:24 PM | Likes Like |Link to Comment
  • Capital Products Partners LP Still A Strong Buy [View article]
    Philipsonh,

    So according to their website does CPLP send a K-1 Partnership Tax Form or a 1099-DIV C-Corp Tax Form?

    Website: http://bit.ly/S7LLU2 (For anyone interested please see the Company Overview paragraph)

    Also, technically the legal name is "Capital Product Partners L.P." (no S after the word product). You can verify any public company's legal name by looking at the covers of their public filings, here is a link to the most recent CPLP equity offering filing: http://1.usa.gov/1I2eW8X

    Best Regards,
    Phil
    Jun 1, 2015. 02:04 PM | Likes Like |Link to Comment
  • Capital Product Partners LP: A Dividend Investor's Dream (>10% Yield) At A Deep Value Price [View article]
    Emily,

    Thanks for the response. It's totally up to you, if you think it is worth it for you to correct your model then please do. From my years as an energy investment banker I have a habit of looking extremely closely at analyst models. You also need to be sure that you are modeling the Incentive Distribution Rights correctly for CPLP when you start increasing the distribution in future years. The tips and corrections I have pointed out will materially change your target price of $18.

    Best Regards,
    Phil
    May 15, 2015. 11:37 AM | 1 Like Like |Link to Comment
  • Hi-Crush Is Best Of Breed [View article]
    Alex,

    Does HCLP have Incentive Distribution Rights that it pays to its General Partner?

    Best Regards,
    Phil
    May 14, 2015. 11:30 AM | Likes Like |Link to Comment
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