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  • Attractively Valued Blue-Chip Dividend Champions For Your Retirement Portfolios  [View article]
    Hi Chuck, nice article and framework. a few questions.

    1) the green shaded area, does that basically represent the trailing peg? it's a little unclear in the laballing, I'm just trying to understand what exactly the graph is saying and how you're quantifying what I think is intrinsic value

    2) does your program automatically update the screen every month with all the charts etc in a systematic way? or do you have to manually run the it every month and then pick a few you like?

    3) on a few of the sample stocks I noticed that the stock has lagged the div % growth rate over the past couple years. How do you read that phenomenon, is it forecasting lower a lower furture growth rate ( because the macro is stuck in the mud) or is this the time to get in the names as at some point in the future, the div yield will revert and the stock price will appreciate?

    May 6, 2013. 03:05 PM | Likes Like |Link to Comment
  • Hi-Crush Partners: Digging For Dollars  [View article]
    One question, i beleive the payout ratio is closer to 100% than 15%. I think only 42% of the earnings are distributable to shareholders which is pretty close to what they distributed. the other 58% of earnings is retained by the subordinated shareholders which I'm not sure are really subordinated: "because a lower percentage of total outstanding units will be subordinated units, the risk that a shortfall in the payment of the minimum quarterly distribution will be borne by our common unitholders will increase" is this boiler plate stuff? my hunch is that management sees a floor in their sand prices at around the mid-50's. Around that level, HCLP can maintain the 1.90 div because .55 of it will be made up of the preferred dividend from the new augusta drop in. that means if pricing does in fact detiortate into the mid 50s rather than the mid 60s they've averaged previously, the stock is basically pegged at $20 unless we see a big move in sand prices either direction. The drop-in can only make up for so much to the downside and to the upside dilution will take time to work through as augusta converts to common shares. So this Augusta preffered stock is basically a kind gift from management to keep the stock price up which could be a sign that they are going to take care of the LPs as best they can in the future but it also suggests there is very little upside unless the horizontal rig count really takes off. would love to hear what others are thinking here.
    Apr 26, 2013. 05:50 AM | Likes Like |Link to Comment
  • Hi-Crush Partners: Digging For Dollars  [View article]
    does anyone have any good reports from freedonia or the banks on frac sand? thanks!
    Apr 20, 2013. 11:31 PM | Likes Like |Link to Comment
  • Hi-Crush Partners: Digging For Dollars  [View article]
    This is one of the few thoughtful peices I've read on the company. No jibber jabber about technicals etc. A few thoughts: I think this stock comes down to who else has refining capacity in the region or who is building it. EOG for example has to ship thier sand to Texas to be refined, implying that they will never beat HCLP's $15 a ton (?) and I think the mom and pop's cost is something like $40 a ton. As you note, the thing couldbe a big roll up really fast. If HCLP is one of the only companies with a quarry near the rails and adjacent to a refining plant, they might have the market locked down for a year or two or more. There are plenty of mines near the rails but sand quality is hard to know unless you're a buyer or something but without a processing plant there, no one will never beat HCLP on cost which is all that matters in a commodity business. Other than driving around the state myself, I don't know how to find this info. Most sources I've found aren't complete, including the state's website I beleive. Also, looking a the dated state geologic maps, it seems HCLP's mines are in a curious place considering that most other mines have been built around obvious outcrops. I'm not a geologist but I've also heard that the sand around chippawa is now where all the focus is and what seems to be working the best. It also makes the most sense looking at the maps. I might be getting them consfused with PDH but I think the CEO or Chairman was an exec a MS I-banking, so I'm thinking they've done their homework and more than likely, their ducks are in a row and will be tough to beat. They also wreak if wall street BS and with the kind of leeway they have on the expense and GP side of the house, if I buy this thing, I will always wonder how they are ripping me off, becasue they definitely are, it is just impossible to know how much. They've already proven they have zero credibility with the BHI fiasco. Anyway in summary, I'd love to buy this thing becasue it is a cash cow but I don't understand the competitive dynamics and I just don't trust them, and I need a management I can trust above all else. Again great article. For those trying to calculate PE's, its a guessing game. Unfortunately you have to determine for yourself what a reasoneable earnings number is for them next year and then do the math. Last time I did it, they were pretty fairly valued and (realistically) yielding the industry average. Ebitda multipes are def the way to go as one reader noted and 10x is NOT cheap (assuming the "e" is right) on an absolute basis.
    Apr 19, 2013. 02:37 PM | 1 Like Like |Link to Comment
  • My Must-Own 17% Dividend Yield Equity  [View article]
    Hi Bruce, I totally agree with you. these are wall street machinations with floats small enough to fly under the eye of professional investor scrutiny. they are fooling retail investors who need yield and the GPs have full legal authority to screw the LPs over in numerous ways. what were the 3 traditional MLPs you've mentioned before that don't have the GP overhang? I don't recall but would like to look at for my father. thank you very much
    Dec 14, 2012. 07:00 AM | Likes Like |Link to Comment
  • PetroLogistics: The Time Is Ripe For Dividend Fruit  [View article]
    Hi Douglas, I'll go back and look at my notes, I'm pretty sure one of their neighbors down there has propylene capacity coming on earlier. Thanks for the intel on mgmt. I didn't like how he was an MS banker and then MS of course got the deal and then the ipo was a flop. Also via various line items in the S-1 they extracted roughly $1B in cash out of the company at the ipo. That seemed a little excessive to me considering the size of the float.
    Dec 12, 2012. 05:10 AM | Likes Like |Link to Comment
  • PetroLogistics: The Time Is Ripe For Dividend Fruit  [View article]
    Hi Douglas, good article. Where do you get your propylene spot prices? Also, have you looked at the PE fund's track record ? (not york, the other one) I have yet to put any efforts into that angle but I'd be interested to see what kind of reputation they have and what their likely holding period looks like. They seem a little slick but I don't know them so i could be reading something into it. I like your risk/reward commentary but I'm scared to death that if a worst case scenario did play out- like a recession, with competing capacity coming online in '14, these guys wouldn't hang in there next to the smaller holding LPs (dump shares, lever up and extract etc.) so instead of having 5 or 6 dollar floor, you have something a bit more painful.
    Dec 10, 2012. 04:24 AM | Likes Like |Link to Comment
  • Excessive Hi-Crush Worries Provide Striking Opportunity  [View article]
    Also on the call they would say NOTHING about how or why the contract was lost. No details. Come on. That is way to big to drop that bomb and then not say anything
    Dec 6, 2012. 09:32 PM | Likes Like |Link to Comment
  • Excessive Hi-Crush Worries Provide Striking Opportunity  [View article]
    Btw, nflx is another example of the BS -capade that is wall street.
    Dec 6, 2012. 09:30 PM | Likes Like |Link to Comment
  • Excessive Hi-Crush Worries Provide Striking Opportunity  [View article]
    I have a research firm that specializes in e&p I use but you don't need one. Google pressure pumping prices, pick one of many decent sources that pop up. There is clearly dislocation. I'm not an expert in the field but when something is this far off, you don't need to be. Pricing is complex but pressure pumping is a rough proxy. This suggests that they will not fill the volumes at the previous price but on the call they said they were confident they could. If they were so confident why didn't they do so before the call? If the contract was no longer economical for bhi, wouldn't that suggest pricing has deteriorated? Maybe they are not liars, but if i put money on it,i would bet they are lying. Read my previous posts on the subject. The call was fairly laughable.
    Dec 6, 2012. 09:25 PM | Likes Like |Link to Comment
  • Excessive Hi-Crush Worries Provide Striking Opportunity  [View article]
    I meant, I wouldn't be surprised if they lost another contract
    Dec 6, 2012. 05:17 PM | Likes Like |Link to Comment
  • Excessive Hi-Crush Worries Provide Striking Opportunity  [View article]
    They are liars. Why do ppl blv cart blanche what mgmt says? Pricing is obviously worse now and they will not be able to fill the volumes at the previous price. Why would bhi break if that wasn't the case? It is non sensicle. Nothing against your analysis but far too much credibility is given these guys. They shouldn't have sat on the bhi news for that long and then to say pricing power was there when pressure pumping is clearly much weaker is just a total lie. I would be surprised if they lost ANOTHER contract. Tis is how this business works. Not a value, it's a value trap
    Dec 6, 2012. 05:14 PM | Likes Like |Link to Comment
  • My Must-Own 17% Dividend Yield Equity  [View article]
    also mgmt claimed they could fill the entire lost contract volume at the SAME PRICE which is patently false and they know it
    Dec 6, 2012. 12:13 PM | 1 Like Like |Link to Comment
  • My Must-Own 17% Dividend Yield Equity  [View article]
    maybe your right about the basis spread staying wider for longer but its a trade not an investment imho. and there is still too much global refining capacity, this season was just exacerbated by greater than expected shutdowns and the favorable mid continent basis situation. those tend to be short lived from what ive been told, tho ppl have definitely made a ton of money in the trade. im more of a longer term guy. for hclp, using the pressure pumping mkt as a proxy for frac sand, its been in a pretty good decline and will likely continue that way into next year as the e&p credit bubble after shocks are finally being realized. id be willing to bet they lose another contract, thats just how that business works. i listened to the call, mgmt is full of BS. they know there are other contracts at risk. there just isnt enough sell side oversight to call these guys out. retail investors think they're getting a good deal with these big div's. im sorry but we're in a zero interest world, double digit yields are a mirage from what ive seen thus far
    Dec 6, 2012. 12:10 PM | 1 Like Like |Link to Comment
  • My Must-Own 17% Dividend Yield Equity  [View article]
    Hi Todd, Bruce makes a good point. Lots of analysts use normalized earnings for highly cyclical industries and to do that you need to see a couple cycles to get a feel for it, espeically when big payout variable ratios are involved. I'm with him on some of these new mlps that are likely taking advantage of cheap financing at the expense of retail investors - pdh/hclp are my favorite examples. I get the Bakken/oil sands location point but these basis spreads tend to close over the near/medium term as spot traders arb out the differentials. my 2 cents.
    Dec 3, 2012. 03:58 PM | 1 Like Like |Link to Comment