Seeking Alpha

rfeinblatt's  Instablog

rfeinblatt
Send Message
Rob Feinblatt is an individual investor.
  • RNO could be a coal gem for MLP investors 0 comments
    Dec 31, 2010 10:57 AM | about stocks: RNO, WLB, NRP, ARLP
     Reading presentation of this recent MLP IPO in coal from Raymond James conference.

    first off, the name seems off peoples radar screens versus OXF or NRP which have good fundamentals but less DCF coverage and some hair on them.

    RNO projected 100m ebitda for sept 2011 annual with 77% of coal contracted out for the yr leaving some upside to numbers i would think given coal prices have gone up alot.  also gives them room to contract strong 2012 rates.

    DCF coverage is a huge 1.7x for minimum distribution of $1.78 per yr.  they have expansion capex of 30m roughly they think which should add to future growth but also will be financed with proceeds from IPO and/or they have very lower debt to ebitda of 0.6x it says.  

    the stock is $23.50 or so, so 7.50% yield but would expect during 2011 them to normalize higher their distribution levels given 1.7x coverage is way too high even if doing expansion capex (which can be mix debt and equity down the road in 2012 and fwd).

    oxf and nrp with much lesser coverage ratios are around 7% yield.

    i think this RNO catches a move to high 20s in the new yr is my investment thesis and we can OWN for a long time and see higher distributions
    Themes: coal, mlp Stocks: RNO, WLB, NRP, ARLP
Back To rfeinblatt's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

  • ENP...does anyone know why the reaction so violent? not involved but thinking i should be
    May 3, 2010
  • YONG initiated with a BUY at Chardan with $16 target, a double! same as my price target
    Mar 17, 2010
  • YONG doubling my pos size today. dn after great qtr, outlook....is it down with CAGC.PK which trades at 2 times the multiple of YONG? silly
    Mar 16, 2010
More »

Latest Comments


Most Commented
Posts by Themes
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.