Atlas Energy targeted by Hedgeye's Kaiser

Atlas Energy's (ATLS -6.6%) only material source of income is distributions from Atlas Pipeline Partners (APL -2.7%) and Atlas Resource Partners (ARP -5.4%), says Hedgeye's Kevin Kaiser, but the majority of APL's and ARP's distributable cash flow is a function of aggressive non-GAAP accounting.

"In our view, ARP and APL’s distributions are funded with capital raises – not real profits – and that can only go on for so long." The downside is considerable, concludes Kaiser, for all three MLPs, particularly ATLS.

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Comments (13)
  • hivoltage
    , contributor
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    Looking forward to Kevin's facts in his April 24th report that show ARP's and APL's distributions are funded by capital raises .
    Now would be a good time for ARP to raise their distribution(without a capital raise) and squeeze the shorts a little .
    21 Apr 2014, 01:17 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (1394) | Send Message
    The folks at Hedgeye seem to have an easy time creating a nice MLP portfolio for themselves. They create alot of opportunities for us at the same time.
    21 Apr 2014, 01:21 PM Reply Like
  • Maobama
    , contributor
    Comments (508) | Send Message
    I predict the mother of all short squeezes led by Leon Cooperman.
    21 Apr 2014, 01:27 PM Reply Like
  • Davephd
    , contributor
    Comments (1180) | Send Message
    I'ts beginning to look like Cramer must have gone short in ARP in early March given his continuing effort to force the price down: 4/8/14 , 3/31/14 , and 3/19/14 . He is beginning to sound like a stuck record.
    21 Apr 2014, 01:42 PM Reply Like
  • hivoltage
    , contributor
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    "In our view, ARP and APL’s distributions are funded with capital raises – not real profits – and that can only go on for so long."


    I didn't know MLPs were supposed to show "real profits" , I thought the distributions were funded by distributable cash flow .
    21 Apr 2014, 03:12 PM Reply Like
  • Factzplz
    , contributor
    Comments (309) | Send Message
    This is an echo of the attack on Linn Energy (LINE & LNCO) last year, which knocked those stocks down 50%, and they still have only recovered half of the loss.


    America is the land of free speech, though a cost may be paid by honest people.
    I wonder if God deals with this here, or hereafter.
    21 Apr 2014, 06:33 PM Reply Like
  • DanDaniels
    , contributor
    Comments (16) | Send Message
    Breitburn Energy was lumped in with that Linn Energy attack. It was 19 when Kaiser referred to it as Linn Energy Junior and after Barron's did their story from Hedgeye (unbelievably) it dropped from 19 to 14 in 2 days on millions of shares. God knows how many people were smoked out at the bottom who sold on Kaiser's recommendation.


    Kaiser claimed the same thing then as he is now with Atlas. Distributions are all capital raises and manipulating maintenance capex. Well since that story last July, BBEP has raised their distribution 3 consecutive quarters and the unit price is back to 20.36. I wonder how those people Kaiser "helped" by his short recommendation, feel having sold at 14 or 15.


    I would be very interested to see if after the Atlas research report is issued on the 24th as telegraphed by Kaiser (and by the way, what professional tells the world he's going to issue a negative research report days before he issues it?) whether Barron's then follows up with a major trash piece. This would be a very disturbing pattern as Barron's also published stories on Linn, BREITBURN and QR Energy, in addition to Kinder Morgan...all of which were recommended as shorts by Kaiser and Hedgeye prior to Barron's running the stories.


    In my opinion, Atlas is a well run company as a mid steam pipeline. It gathers gas, transports it and processes it into NGLs which are marketed to end users. It's a business model that has been proven to work very well. Look at Markwest, Targa, or Williams. Same model.


    APL's maintenance capex is about 8% of EBITDA, right in the middle of its peer group. It accounts for derivative hedge expenses in the most conservative possible manner. They operate well within GAAP principles and the law. This is not even remotely close to the BWP story for anyone who might speculate or try to make that connection.


    Their new west texas facility has been slow to ramp up to full capacity from Eagle Ford properties which is why their distribution has been flat the last 2 quarters. But it should be full by year end. I look for them to resume distribution hikes by Q3 or Q4 and expect solid growth for several years. Lots of room for growth there. This was all projected in the Q4 conference call, which I doubt Kaiser even participated in.


    I already own APL, but will own a lot more if they hit it on this blatant short attack. I look for a carbon copy of BBEP, especially if Barron's does another trash piece.
    21 Apr 2014, 09:56 PM Reply Like
  • hivoltage
    , contributor
    Comments (632) | Send Message
    Kevin Kaiser at Hedgeye seems to be carrying out these so-called short attacks against MLPs at regular intervals . First it was LINE/LNCO in Sept. 2013 , then KMP/KMI around Dec. 2013 now ATLS/APL/ARP .
    I believe his motives are less than transparent and his arguments against LINE and KMP were frivolous and not based on anything substantial . I believe we'll see more the same regarding Atlas companies
    21 Apr 2014, 07:43 PM Reply Like
  • DanDaniels
    , contributor
    Comments (16) | Send Message
    They're about one thing and one thing only in my opinion....subscriber growth. They feed off of publicity. Not surprising that the head of the company tweets about how great he is and how bad everyone else is all day long. Know any other pro hedge fund managers who do that? Or have the time to do that? I don't.
    21 Apr 2014, 10:07 PM Reply Like
  • delprice
    , contributor
    Comments (1972) | Send Message
    Apparently another example of ethically transmogrified motives. Slandering financials of a company should be a crime.


    Is this all that elite universities are able to churn out, what the US education system is known for these days?
    21 Apr 2014, 10:40 PM Reply Like
  • SaltyDog62
    , contributor
    Comments (838) | Send Message
    IF this turns out to be followed up by a Barron's negative hit piece, is this not evidence of some type of collusion? Three companies, separated by about three months apart. Coincidence? Smells like Hedgeye, Barrons working together to bring down PPS. For what? Many uninformed may be hurt, I will not be one of them. I will profit!
    21 Apr 2014, 11:54 PM Reply Like
    , contributor
    Comments (101) | Send Message
    Well, this should be fun. Last years Hedgeye hit on LINN was brilliantly executed and aided and abetted by their cohort, Barron's. Of course, LINN was in registration with the BRY buyout, which materially retarded their ability to make public statements. This time everybody knows about these guy, and, Carlyle/Riverstone own 25.5% and Leon Cooperman, another 9%. These aren't exactly weak retail holders. Standby!
    23 Apr 2014, 05:38 PM Reply Like
  • hivoltage
    , contributor
    Comments (632) | Send Message
    Leon Cooperman bought another +100,000 units of ARP two days ago for around $20/unit .
    23 Apr 2014, 07:47 PM Reply Like
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