Royal Dutch Shell Runs For Cash To Create Shareholder Value [View article]
Fear&GreedTrader
Thanks for reviewing my article and commenting. Indeed, I believe there are several E&P companies that have good upside potential. I've had my eye on EOG Resources, for one.
My Energy sector exposure is significant. I own stock in RDS, HAL, XOM and ETP; all of which I have written about on S.A. I have not thought about writing about some of the other E&P companies, since other than EOG, I doubt I would take on more exposure to the sector.
However, I may reconsider based upon your suggestion.
Energy Transfer Partners: The Pieces Are Falling Into Place [View article]
Everyone would like them to increase the distribution. So would management. However, I believe management is waiting for the cash to be right and sustainable first. I see the key metrics to watch are the EBITDA-to-Debt ratio (between 4.00x and 4.25x) and the DCF-to-payout ratio (above 1.05x for at least a couple of quarters with an optimistic forward outlook).
If 2013 doesn't see an uplift, then there's a problem.
TRW Automotive: There's Still Some Upside Left [View article]
Interesting article. I bought TRW stock about 18 months ago on the cheap. I believe it's nearly at full value now.
The quirk about this stock is the persistent, abnormally low P/E. It's about 8x now. Based upon growth metrics, it would seem like it should be about 15x, but I just can't see that kind of multiple expansion anytime soon.
The historical cash flow multiple doesn't change the calculus, either. This stock just doesn't seem to command a "normal" multiple on an earnings or OCF basis.
I model 2013 EPS at $6.39. Place a 10x P/E on it, and it looks like a $64 stock.
Curious for any explanations or additional analysis.
High Yield Bond Market Sets New Records [View article]
Excellent article outlining the risk within the HY space. Indeed, there are some safe, good yield equities that may be a better bet.
High yield is like a wild high school party just before the parents get home: pretty good blowout, but when the party's over, there's going to be hell to pay. Beer's still on tap now, so I'm still carrying on with one eye on the door.
My benchmark spread is the Baa yield vs the ten-year T-note, both found on the FRB website. It's 2.81 now. When it gets below 2.0, it's time to exit. Might start scaling out a bit before that.
Juicy Oil Bargains - Part 3: Which Is Best Among The Best? [View article]
Thank you, Timing, for a well-researched and thorough article about the Super Majors. The Energy sector is one of the few laggards remaining in today's market. Your good work has uncovered that from several angles.
There's value there for the patient investor. The dividend yields are such that it makes the wait easier.
My current fav is RDS.A; I am not convinced the BP culture has changed enough post-Macondo, TOT has potential but lacks the management moxie of some others, while Chevron and Exxon are generally good, safe choices. Shell's got a game plan to run for cash, increase dividends, maintain a strong balance sheet, and reinvest heavily in new business.
Energy Transfer Partners: The Pieces Are Falling Into Place [View article]
Another alternative: ETP current investors can participate in a distribution re-investment plan whereas additional units are purchased at five percent discount from the listed price, with no fees. Many discount broker handle this just for the asking.
While I suspect Morningstar has a lot of guys smarter than me, I believe I would not "consider selling," at $85.05; unless they are talking several years from now.
Within the next year or so, at $85, I don't think it would take me more than a second of "consideration" before hitting the "sell" button.
Energy Transfer Partners: The Pieces Are Falling Into Place [View article]
Hello jackmaster!
Thanks for stopping by to read and share some comments.
I'll try to offer a few thoughts on your queries.
The size of APL units and Sunoco stations is large enough to matter to the ETP storyline. The units were worth about $1.3 billion when Energy Transfer obtained them as part of the propane divestiture deal. At least on paper, the unit price is higher today than it was a year ago. So that seems to bode well. As they say, a billion dollars ain't chicken feed.
The Sunoco retail business is harder to evaluated. From memory, I think that business might generate as much as $200 million cash a year. Then there's some run-and-maintain capital to offset it. The margins are low, but pretty ratable. Maybe that business is worth $1.5 to $2 billion? It would move the needle, too.
Indeed, if the APU units and Sunoco stations were divested; it would make a difference.
As far as the project slate, I'm pretty keen on the Trunkline opportunity. The other project that got my attention in the NGL import-export terminal at Nederland, TX with Shell as an anchor client. Shell is into NGLs in a big way. They will not go away, nor would they sign a deal with SXL without knowing they have the staying power.
Interesting time for Energy Transfer. The past has not been all that good; just a big (but stagnant) distribution.
Energy Transfer Partners: The Pieces Are Falling Into Place [View article]
Hi Ray
I don't know much about APL. Quick check indicates it's small, and concentrates on natural gas and NGL transportation. The cash flow statement looks alright. Good revenue growth. Suspect management will continue to issue new units to pay for capex.
Going forward, I like Energy Transfer since they have so many new, moving parts now. APL is structured similarly to what ETP looked like several years ago. They concentrated in different basins, but the natural gas tilt is much the same.
Energy Transfer Partners: The Pieces Are Falling Into Place [View article]
That's a very good question
While I'm sure you know it's a question to be answered contingent upon the investors' overall objectives, I think a case can be made to own both. If the Energy Transfer enterprise is successful, the GP could stand to make more capital gains through IDRs. Please note that ETE put off the receipt of a number of IDRs for several years to make some of these recent asset deals happen. Those will wash back in later; with the expectation of significant gains for the General Parnter.
The rule-of-thumb is that the GP runs for capital gains with less income; the LP runs for higher income and less capital gains.
I have been thinking about the same thing for my own account. Currently, I only own the LP units.
Annaly Capital Faces Continued Pressure On Its Net Spread [View article]
If history is any guide, mortgage interest rates rose between 2004 and 2008. In 2004, NLY dividend held up but the share price fell, then in 2005 the dividend fell, but the share price rose consistently into 2008.
Annaly Capital Faces Continued Pressure On Its Net Spread [View article]
I seek some added color to articles about mREITS:
The consensus is that as the Fed has compressed interest rates, the NIM has likewise compressed and pressured mREIT profits. I think I understand that part.
So why would rising interest rates also hurt mREITs? Would not Fed action tend to raise the long end of the interest rate curve, thereby improving NIMs and mREIT profits?
Energy Transfer Partners: The Pieces Are Falling Into Place [View article]
Looking back, many MLPs have outperformed Energy Transfer. This fact is undisputed. However, investors must look forward. If Energy Transfer management can successfully integrate the recent M&A activity, then long-suffering total returns versus some of the other MLPs may change.
The company profile today has been re-arranged versus the asset base in place a few years ago.
As noted, ETP units have outperformed the AMLP composite ETF year-to-date; larger cash distribution discounted.
Royal Dutch Shell Runs For Cash To Create Shareholder Value [View article]
Thanks for reviewing my article and commenting. Indeed, I believe there are several E&P companies that have good upside potential. I've had my eye on EOG Resources, for one.
My Energy sector exposure is significant. I own stock in RDS, HAL, XOM and ETP; all of which I have written about on S.A. I have not thought about writing about some of the other E&P companies, since other than EOG, I doubt I would take on more exposure to the sector.
However, I may reconsider based upon your suggestion.
Royal Dutch Shell Runs For Cash To Create Shareholder Value [View article]
Energy Transfer Partners: The Pieces Are Falling Into Place [View article]
If 2013 doesn't see an uplift, then there's a problem.
Energy Transfer Partners: The Pieces Are Falling Into Place [View article]
TRW Automotive: There's Still Some Upside Left [View article]
The quirk about this stock is the persistent, abnormally low P/E. It's about 8x now. Based upon growth metrics, it would seem like it should be about 15x, but I just can't see that kind of multiple expansion anytime soon.
The historical cash flow multiple doesn't change the calculus, either. This stock just doesn't seem to command a "normal" multiple on an earnings or OCF basis.
I model 2013 EPS at $6.39. Place a 10x P/E on it, and it looks like a $64 stock.
Curious for any explanations or additional analysis.
High Yield Bond Market Sets New Records [View article]
High yield is like a wild high school party just before the parents get home: pretty good blowout, but when the party's over, there's going to be hell to pay. Beer's still on tap now, so I'm still carrying on with one eye on the door.
My benchmark spread is the Baa yield vs the ten-year T-note, both found on the FRB website. It's 2.81 now. When it gets below 2.0, it's time to exit. Might start scaling out a bit before that.
Juicy Oil Bargains - Part 3: Which Is Best Among The Best? [View article]
There's value there for the patient investor. The dividend yields are such that it makes the wait easier.
My current fav is RDS.A; I am not convinced the BP culture has changed enough post-Macondo, TOT has potential but lacks the management moxie of some others, while Chevron and Exxon are generally good, safe choices. Shell's got a game plan to run for cash, increase dividends, maintain a strong balance sheet, and reinvest heavily in new business.
Energy Transfer Partners: The Pieces Are Falling Into Place [View article]
While I suspect Morningstar has a lot of guys smarter than me, I believe I would not "consider selling," at $85.05; unless they are talking several years from now.
Within the next year or so, at $85, I don't think it would take me more than a second of "consideration" before hitting the "sell" button.
Energy Transfer Partners: The Pieces Are Falling Into Place [View article]
Thanks for stopping by to read and share some comments.
I'll try to offer a few thoughts on your queries.
The size of APL units and Sunoco stations is large enough to matter to the ETP storyline. The units were worth about $1.3 billion when Energy Transfer obtained them as part of the propane divestiture deal. At least on paper, the unit price is higher today than it was a year ago. So that seems to bode well. As they say, a billion dollars ain't chicken feed.
The Sunoco retail business is harder to evaluated. From memory, I think that business might generate as much as $200 million cash a year. Then there's some run-and-maintain capital to offset it. The margins are low, but pretty ratable. Maybe that business is worth $1.5 to $2 billion? It would move the needle, too.
Indeed, if the APU units and Sunoco stations were divested; it would make a difference.
As far as the project slate, I'm pretty keen on the Trunkline opportunity. The other project that got my attention in the NGL import-export terminal at Nederland, TX with Shell as an anchor client. Shell is into NGLs in a big way. They will not go away, nor would they sign a deal with SXL without knowing they have the staying power.
Interesting time for Energy Transfer. The past has not been all that good; just a big (but stagnant) distribution.
That calculus may be changing.
Energy Transfer Partners: The Pieces Are Falling Into Place [View article]
I don't know much about APL. Quick check indicates it's small, and concentrates on natural gas and NGL transportation. The cash flow statement looks alright. Good revenue growth. Suspect management will continue to issue new units to pay for capex.
Going forward, I like Energy Transfer since they have so many new, moving parts now. APL is structured similarly to what ETP looked like several years ago. They concentrated in different basins, but the natural gas tilt is much the same.
Energy Transfer Partners: The Pieces Are Falling Into Place [View article]
While I'm sure you know it's a question to be answered contingent upon the investors' overall objectives, I think a case can be made to own both. If the Energy Transfer enterprise is successful, the GP could stand to make more capital gains through IDRs. Please note that ETE put off the receipt of a number of IDRs for several years to make some of these recent asset deals happen. Those will wash back in later; with the expectation of significant gains for the General Parnter.
The rule-of-thumb is that the GP runs for capital gains with less income; the LP runs for higher income and less capital gains.
I have been thinking about the same thing for my own account. Currently, I only own the LP units.
Annaly Capital Faces Continued Pressure On Its Net Spread [View article]
Annaly Capital Faces Continued Pressure On Its Net Spread [View article]
The consensus is that as the Fed has compressed interest rates, the NIM has likewise compressed and pressured mREIT profits. I think I understand that part.
So why would rising interest rates also hurt mREITs? Would not Fed action tend to raise the long end of the interest rate curve, thereby improving NIMs and mREIT profits?
Energy Transfer Partners: The Pieces Are Falling Into Place [View article]
The company profile today has been re-arranged versus the asset base in place a few years ago.
As noted, ETP units have outperformed the AMLP composite ETF year-to-date; larger cash distribution discounted.
Energy Transfer Partners: The Pieces Are Falling Into Place [View article]