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Richard Shaw

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  • Don't Accept Buyback Yield Argument Without Substantial Caveat [View article]
    That's pretty much my view too, about what it yield. However, I do think that companies that can and do buyback shares have the potential in the right circumstances to increase earnings cheaply. It's the old Buy or Build question. When it is more expensive to build than to buy, purchasing other companies or purchasing own shares can be accretive to earnings, which eventually is likely to show up in dividends -- but I agree, that people are reaching for straw with buyback yield
    Jun 15 11:13 AM | 1 Like Like |Link to Comment
  • Financials And Infrastructure MLPs Least Favored By Analysts For Next 12 Months [View article]
    Not necessarily. It all depends on your time frame and tax situation. So far we are not reducing pipeline exposure, but we have a multi-year view on them.
    Jun 3 03:23 PM | Likes Like |Link to Comment
  • Financials And Infrastructure MLPs Least Favored By Analysts For Next 12 Months [View article]
    I don't think the negative projection is a reflexion of underlying fundamentals. Instead, I think it is a belief on the part of analysts that the prices have risen such that the MLPs are providing significantly less yield than in some prior periods, and as such are more subject to interest rate risk than some other categories of assets.
    Jun 3 01:01 PM | Likes Like |Link to Comment
  • Financials And Infrastructure MLPs Least Favored By Analysts For Next 12 Months [View article]
    No, the energy sector is expected to rise, and the small sliver of energy called MLPs is expected to decline -- energy is dominated by the integrated oil and gas companies -- the MLPs are a small part of the energy sector
    Jun 3 10:12 AM | Likes Like |Link to Comment
  • MLPs With Lower Leverage May Fare Better As Tapering Begins And Rates Rise [View article]
    the lowest ratio (0.35) is on top and the highest ratio is on the bottom
    since the article is about the potential advantage of a low ratio, the low ratio is on top
    Jun 1 01:30 PM | Likes Like |Link to Comment
  • 5 Highest Analyst Rated Infrastructure MLPs [View article]
    Because that was a crash year -- how did the security do during the crash
    May 24 09:27 PM | 2 Likes Like |Link to Comment
  • MLPs With Lower Leverage May Fare Better As Tapering Begins And Rates Rise [View article]
    The potential flaw is that rates went from one level of "normal" to another level of "normal". Today we are talking about going from artificial non-market low rates to normal sometime in the future.

    The rotation from bonds to equity or vis versa would have been different then versus forward.

    hey, I can't guarantee anything, but would rather own a low leverage MLP vs a high leverage MLP, when rates re-normalize. ya pays yer money and takes yer chances
    May 23 12:51 PM | 2 Likes Like |Link to Comment
  • MLPs With Lower Leverage May Fare Better As Tapering Begins And Rates Rise [View article]
    As for the "notoriously bad" comment, we are all rather stuck when it comes to computer screening. I have not found a single database that does not contain some data that is either bad or significantly in conflict with some data points in some other database. That's just the way it is with data vendors who try to capture everything about every security. To the extent that computer filtering eliminates stocks, they tend to be lost to the searcher unless unearthed by a different search or searching in a different database. To the extent that computer filtering suggests a security, then the deeper reading has to take place to corroborate the filter data, and then go to next levels of examination.
    May 23 10:48 AM | 1 Like Like |Link to Comment
  • MLPs With Lower Leverage May Fare Better As Tapering Begins And Rates Rise [View article]
    I am with you on all your comments. If I were to write about a specific MLP, I would certainly go into those sorts of detail and refinement, but this as you acknowledge is a broad brush survey of an industry, just to get people thinking, as you obviously have done it great detail.
    May 23 10:43 AM | Likes Like |Link to Comment
  • MLPs With Lower Leverage May Fare Better As Tapering Begins And Rates Rise [View article]
    What is the data source for the financial info in the table? The EV/EBITDA numbers look a little off to me; for example, PVR in the table is showing EV/EBITDA of 59.8x while I come up with EV/EBTIDA of 19.2x. I AGREE THE PVR DATA SEEMS WAY OFF. CHECKED OTHER DATABASES AND FOUND VAIOUS RATIOS -- TO AVOID ISSUES WITH THAT WHOE QUESTION I HAVE SUBMITTED A REPLACEMENT TABLE WITH EV/EBITDA RATIOS FROM S&P CAPITAL IQ AS RENDERED BY YAHOO FINANCE SO THAT ALL READERS HAVE ACCESS TO THE SAME SET OF NUMBERS. FOR PVR CAPITAL IQ RENDERS 14.84 AS OPPOSED TO THE "BAD" DATA POINT IN THE ORIGINAL TABLE AND THE 19.2 YOU DERIVED FROM YOUR CALCULATION OR DATABASE SOURCE. THAT REPLACEMENT TABLE WILL BE UP SHORTLY.

    Is the EBITDA just Trailing Twelve Month EBITDA? I PRESUME BUT DO NOT KNOW THT CAPITAL IQ USES TRAILING 12 MONTH DATA Do you have a view about whether or not it would be better to look at EV / EBITDA using EBITDA less any GP Distributions? THAT WOULD BE AN INTERESTING NUMBER WHICH I DID NOT HAVE READILY AT HAND. NOTE THIS TABLE IS NOT MEANT TO BE A COMPLETE ANALYSIS. BIT JUST A SET OF PRELIMINARY INDICATORS TO SUGGEST WHERE MORE DIGGING COULD BE MOST USEFUL I'm assuming that the EV numbers in the table are just using the Market Cap of the LP Units (am I correct in assuming that though?). NO THEY USED THE STANDARD DEFINITION OF EV WHICH INCLUDES NET DEBT

    Is there a reason you used Total Liabilities / Total Assets as the quick measure of leverage? COULD HAVE USED ONE OF SEVERAL RATIOS (LONG-TERM DEBT TO ASSETS, LONG-TERM DEBT TO CAPITAL, LONG-TERM DEBT TO EQUITY, TOTAL DEBT TO EQUITY, ETC -- JUST PICKED ONE THAT IS PROBABLY UNIVERSALLY UNDERSTOOD, AND AN INDICATOR -- OTHER RATIOS WOULD BE USEFUL TO EXAMINE ALSO. Does that tend to make an older more established pipeline MLP look "more levered" because it has been depreciating its assets for a longer period? YES, EXCEPT TO THE EXTENT THAT DEPRECIATION IS A REFLECTION OF REAL PHYSICAL DEPRECIATION THAT REQUIRES CAPITAL EXPENDITURE FOR MAINTENANCE IN GOOD WORKING ORDER. IN A FOUR COLUMN DATA TABLE, YOU CAN ONLY INCLUDE SO MUCH INFORMATION. THE POINT OF THIS ARTICLE IS SIMPLY TO GET PEOPLE THINKING ABOUT WHAT HAPPENS TO STOCKS THAT HAVE ATTRACTED A SIGNIFICANT FOLLOWING AMONG THOSE WHO WOUL OTHERWISE HAVE PURCHASED BONDS WHEN INTEREST RATES RISE, AND AMONG STOCKS THAT HAVE MORE RATHER THAN LESS DEBT. WITH RESPECT TO THE SECOND POINT, THAT IS WHAT I SAID THERE IS NOT DISTINCTION MADE IN THE TABLE AS TO THE TERM STRUCTURE OF DEBT OR WHETHER FIXED OR VARIABLE RATE. Also wouldn't that tend to favor MLPs that have grown more by acquisitions because that would lead to a comparatively higher number for Total Assets when compared to asset growth from organic growth projects? THIS ISSUE QUESTION WAS NOT ADDRESSED IN THE ARTCLE. WOULD HAVE TO MULL OVER THAT QUESTION

    Would Total or Net Debt / EBITDA be a better measure of leverage and interest rate risk (i.e. a little more comparable across the universe of names regardless of how much they have depreciated their assets)? PERHAPS YES. I WOULD ENCOURAGE PEOPEL TO LOOK AT THAT TOO.

    Is there some level of U.S. Treasury rates that would motivate you to move client money out of MLPs and into U.S. Treasuries? I WOULD BE MORE INCLINED TO BE GUIDED BY PRICE ACTION IN CONJUNCTION WITH OBSERVATION OF INTEREST RATES AS A POSSIBLE CAUSE FACTOR. If so what level is that and would that be the starting point for when it may be possible that "Securities that have served as yield alternatives to bonds for many investors will likely experience some negative price impact as interest rates rise"? If it is not an absolute number for U.S. Treasuries is there perhaps a spread between the 2 securities that would motivate you to make the move?

    Could there be some pushback from clients that have a zero tax basis in their direct MLP positions? THAT IS A SPECIFIC SET OF CIRCUMSTANCES THAT WE DO NOT FACE AT THIS TIME AND ONE THAT IS TOO INDIVIDUALIZED IN NATURE TO ALLOW A GENERIC ANSWER. Would the possible tax leakage cause the needed U.S. Treasury rate to be even higher before that group of people start selling their MLPs (thereby partially delaying and/or dampening the impact of rising interest rates at least for those specific MLP positions)?

    Do you have any historical data analysis to support the theory that "Those yield alternative securities with lower leverage may be less impacted than those with high leverage"? I HAVE NONE TO PRESENT, BUT IT IS MY BELIEF THAT IS TRUE, AND THAT BELIEF HAVE ALSO BE EXPRESSED BY MULTIPLE MAJOR INVESTMENT HOUSES THE PAST 6+ MONTHS. If you know of anything (even if not specific to MLPs) you could point me to or if there is a presentation with data analysis floating around on the web somewhere I'd love to get my hands on it. THE LOGIC IS SIM0LE ENOUGH. IF PEOPLE WHO WOULD NORMALLY BUY A BOND FOR LOW RISK AND INCOME, BUT WERE FORCED OUT OF BONDS DUE TO RATE SUPPRESSION AND INTO HIGHER VOLATILITY ASSETS TO OBTAIN YIELD, WOULD NOT AT LEAST NEW MONEY FLOWS FROM THAT GROUP DIVERT IN PART AT LEAST BACK TO BONDS WHEN RATES "NORMALIZE"? THE LARGER THE SHARE OF TOTAL RETURN FROM AN EQUITY THAT COMES FROM INCOME VERSUS PRICE APPRECIATION, THE MORE IT COMPETE WITH BONDS FOR MONEY FLOWS, AND THEREFORE HAS MORE MONEY FLOW RISK WHEN BOND RATES RISE. YOU COULD CERTAINLY TAKE SOME MLPS WITH LONG HISTORIES AND CALCULATE THEIR MONTHLY OR QUARTERLY HISTORICAL YIELD AND PLOT IT AS A RATIO OR SPREAD TO THE 10-YEAR TREASURY IF THE LOGIC IS NOT PERSUASIVE ENOUGH -- THEN YOU WOULD KNOW FOR SURE.
    May 23 08:58 AM | 3 Likes Like |Link to Comment
  • Bull Run Likely To Continue So Long As Low Quality Outperforms High Quality [View article]
    I I stated throughout the article these are price ratios. This was not an article about total return. It was an article about relative price movements.
    May 22 06:19 PM | Likes Like |Link to Comment
  • Bull Run Likely To Continue So Long As Low Quality Outperforms High Quality [View article]
    I was referring to those investors who are in the equity side (that is why I called them "equity investors" -- you are correct that there is a huge group of "investors" who are on the sidelines
    May 22 06:16 PM | 1 Like Like |Link to Comment
  • 4 Companies With Extreme Price Charts And High Statistical Probability Of Decline [View article]
    It's not a model, and we made no extrapolation, and said that other fundamentals should be evaluated -- that this is just a way to identify stocks that need a closer look -- so what it your point?
    May 18 06:07 PM | 2 Likes Like |Link to Comment
  • 4 Companies With Extreme Price Charts And High Statistical Probability Of Decline [View article]
    Coming from a battery expert on an article that mentions electric cars, I take that humbly as a great compliment. Thank you.
    May 18 07:32 AM | 1 Like Like |Link to Comment
  • 5 Highest Yielding, High Quality, Low Volatility, Consistent Dividend Growers [View article]
    I understand the shoulds and should nots very well, but the database that publishes them chose to do so and it is data that many yield chasers observe -- the article has been modified to indicated yield to attempt to placate those of you who have had so much trouble with reporting widely distributed data, that is not incorrect, but merely less desirable -- can we finally drop this particular point and concentrate on the purpose of the article
    May 13 03:10 PM | Likes Like |Link to Comment
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