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Ron Hiram  

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  • A Closer Look At Enterprise Products Partners' Distributable Cash Flow As Of 1Q 2014 [View article]
    You are correct that the marginal (vs. average) rate is 48%. However, the break points typically start at 13% (not 2%) and the step-up thresholds for increases were reached years ago, so the bulk of the IDR payments are at 48%. Using ETP as an example: for each current quarterly LP distribution of $0.935, ETE (as general partner) receives $0.558, of which $0.517 is at the 48% rate. Overall, the distribution split is 62.6% to LPs and 37.4% to the GP.
    May 25, 2014. 10:18 AM | Likes Like |Link to Comment
  • A Closer Look At Plains All American Pipeline's Distributable Cash Flow As Of Q1 2014 [View article]
    MLP GPs such as PAGP, KMI and ETE yield less than their underlying MLPs. On the other hand they should provide better growth, less dilution and better alignment of your interests with management's. But, relatively speaking, it is easier to find non-MLP alternatives to the lower-current-yields / faster-growth combination offered by the GPs than it is to find non-MLP alternatives to the higher current yields offered by the underlying MLPs. So if you are concerned about being too concentrated in MLPs for your yield producing investments, you should choose non-MLP alternatives for that portion of your portfolio designed to generate faster capital appreciation, albeit provide less current income.
    May 25, 2014. 07:27 AM | Likes Like |Link to Comment
  • A Closer Look At Enterprise Products Partners' Distributable Cash Flow As Of 1Q 2014 [View article]
    I think management is free to change the non-GAAP measures as it sees fit, but needs to provide proper disclosure and reconciliation to GAAP.
    May 17, 2014. 01:06 AM | Likes Like |Link to Comment
  • A Closer Look At Energy Transfer Partners' Distributable Cash Flow As Of Q1 2014 [View article]
    I don't think litigation is the main conflicts-related risk. Fairness opinions will be procured when assets are transferred and prices will be set so as not to be too egregious. But when conflicts exist, there are many subtle ways to advantage one party and disadvantage the other and many do not require asset transfers. I prefer ETE because it provides better alignment of interests between management and unit holders.
    May 17, 2014. 01:00 AM | Likes Like |Link to Comment
  • Model For Assessing The Sustainability Of American Capital Agency Corp.'s Dividend [View article]
    Cost of hedges are not included. The implicit assumption is that hedges generate benefits that at least offset the costs.
    Apr 19, 2014. 07:50 AM | Likes Like |Link to Comment
  • Model For Assessing The Sustainability Of American Capital Agency Corp.'s Dividend [View article]
    I dislike the management company structure. It creates a compensation mechanism that removes the need to make disclosures regarding compensation and increases the misalignment between the company performance and management's renumeration.
    Apr 16, 2014. 07:55 PM | 1 Like Like |Link to Comment
  • Model For Assessing Sustainability Of Annaly's Dividend [View article]
    I use the same methodology for NLY and AGNC, so the link is correct.
    Apr 13, 2014. 03:02 PM | Likes Like |Link to Comment
  • A Closer Look At Magellan Midstream Partners' Distributable Cash Flow As Of Q4 2013 [View article]
    Label of third column should indeed have been "Yield". Thank you for pointing this out. Creating an "apples-to-apples" comparison for MLPs is difficult. Adopting a narrow definition of coverage, one that includes only that portion of DCF that is attributable to limited partners, requires reducing EBITDA by the total of IDR payments (rather than the 48% of EBITDA as you suggest). This will not neutralize the "noise" created by temporary waivers that GPs frequently grant, but may still be preferable to no adjustment at all. I will try to incorporate a comparison of this kind in a future article.
    Mar 31, 2014. 11:16 AM | 1 Like Like |Link to Comment
  • A Closer Look At Williams Partners' Distributable Cash Flow As Of Q4 2013 [View article]
    They have access to management, to other analysts covering commodities (oil & gas), regulatory developments, tax issues, MLP customers (e.g., utilities, chemicals), to third-party energy research providers, etc.
    Mar 26, 2014. 02:41 PM | Likes Like |Link to Comment
  • A Closer Look At Suburban Propane Partners' Distributable Cash Flow As Of Q1 FY 2014 [View article]
    I eliminated my position and would consider another entry around my previous entry point which was ~$37.
    Mar 25, 2014. 09:35 AM | Likes Like |Link to Comment
  • A Closer Look At Williams Partners' Distributable Cash Flow As Of Q4 2013 [View article]
    I don't see how this can be done, absent a willingness to spend a lot of time and money trying to get information from employees, ex-employees, contractors, etc. And even if you did that, trading on the info would not be permitted.
    Mar 25, 2014. 09:29 AM | Likes Like |Link to Comment
  • A Closer Look At Williams Partners' Distributable Cash Flow As Of Q4 2013 [View article]
    Management projects Adjusted Segment Profit will increase from $1,727 million in 2013 to $2,830 in 2015 (=64% increase). The projection for 2014 is $2,345, up 36% from 2013.
    Mar 23, 2014. 08:53 AM | Likes Like |Link to Comment
  • A Closer Look At Energy Transfer Partners' Distributable Cash Flow As Of Q4 2013 [View article]
    The ETE/ETP GP/LP conflict of interest situation concerns me. I do not currently plan to do so.
    Mar 15, 2014. 09:59 AM | Likes Like |Link to Comment
  • A Closer Look At Energy Transfer Partners' Distributable Cash Flow As Of Q4 2013 [View article]
    Hi Ray. I agree - my investment in ETE is larger than in ETP.
    Mar 15, 2014. 09:56 AM | Likes Like |Link to Comment
  • A Closer Look At Energy Transfer Partners' Distributable Cash Flow As Of Q4 2013 [View article]
    My positions in ETP and ETE were established a while back. While I agree with your comments, ETP's reported and sustainable DCF have been growing faster than KMP's for the past two years. I established my ETP and ETE positions a while back. Unfortunately, at the time I did not consider SXL.
    Mar 15, 2014. 09:53 AM | Likes Like |Link to Comment
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