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AMZA: Show Me The Money


  • AMZA price action is undoubtedly disappointing.
  • However, a closer look at the current earnings season provides a reason to remain cautiously optimistic.
  • When it comes to AMZA it's mostly about management and execution.
  • So J., please show us the money!

Jerry Maguire: Yeah, what, what, what can I do for you, Rod? You just tell me what can I do for you?

Rod Tidwell: It's a very personal, a very important thing. Hell, it's a family motto. Are you ready, Jerry?

Jerry Maguire: I'm ready.

Rod Tidwell: I wanna make sure you're ready, brother. Here it is: Show me the money. Oh-ho-ho! SHOW! ME! THE! MONEY! A-ha-ha! Jerry, doesn't it make you feel good just to say that! Say it with me one time, Jerry.

Jerry Maguire: Show you the money.

Source: Script from the movie Jerry Maguire


One of the questions we received recently was about InfraCap MLP ETF (NYSEARCA:AMZA), a security that both TV and I mentioned/covered on several occasions, most recently during our SA Roundtable interview.

The question we've received was challenging AMZA attractiveness (as a whole) as well as its ability to maintain its distribution going forward.

In this article we will touch upon both aspects.

MLPs' Valuations

Let me say loud and clear: Since the subprime crisis faded, midstream MLPs have not been priced as attractively as they are right now on a risk-adjusted basis.

Sure thing, one may claim that on an absolute basis valuations were even more attractive in early 2016 than they are now. However, if you recall where the economy and energy prices were in early 2016, you may appreciate that we are talking about different ball games, now and then.

This is why we used the term "risk-adjusted" above; it's all relative.

It's also hard to ignore that on an aggregate basis, the current conditions as well as the current production levels have enjoyed better time than they do these days.

This is true when it

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This article was written by

The Fortune Teller profile picture

The Fortune Teller is a team of two analysts with over 30 years of market experience between them. One of the principles is a formerly licensed investment advisor with a background in asset management. They also hold BAs in Accounting & Economics and Computer Sciences, as well as MBAs, which they use to inform their stock selections

They lead the investing group Learn more .

Analyst’s Disclosure: I am/we are long AMZA, WES. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (413)

The Fortune Teller profile picture
Make sure you visit our recent blog post that has tons of (professional) data (as well as fantastic music...):
"StrawBEARry Fields Forever: The Beat Les (Miserables = Markets) Version"


"Strawberry Fields Forever", "Help", "Let It Be", "Yesterday" are four of The Beatles' finest songs.

What the markets can learn from these songs? And how is Liverpool F.C. related to this!?

Trust me, those are songs (and words of wisdom) you don't want to miss.

Happy New Year!!!
The Fortune Teller profile picture
The Wheel Of FORTUNE's End Of 2018 Bargain Deal / Mega Poll

Do any of the daily portfolio watchers know when they jumped up their position in ANDX?
Presumably, after the big dive a couple of weeks ago...more curious as to how good they did at bottom fishing. TIA.
tjhoppe profile picture
This will not answer your specific question, but I have two old spreadsheets that I printed out that will provide a couple of points of reference:
-4/9/18 AMZA owned 1.049MM units of ANDX
-5/9/18 AMZA owned 1.886MM units of ANDX
-today 5/17/18 AMZA owns 1.990MM units of ANDX
anyone see the latest portfolio breakdown?
Lord Hamlake's Chauffeur profile picture
Notice something ?
MtBudmoreView profile picture
interesting info, thanks igor555
pro8 profile picture
BPL went from a larger position to close to being unseen....
phamp1973 profile picture
This going to touch $6.55 again? Would like to add more...😂
The Fortune Teller profile picture
Hi phamp
Your guess is as good as mine
Happy Easter
Toofuzzy profile picture
I started buying in the last year and wanted to keep buying more with the dividends but the recent price action is not what I would expect with oil moving up in price.

What will it take for the underlying securities and AMZA to move higher?
The Fortune Teller profile picture
"What will it take for the underlying securities and AMZA to move higher?"
The short and simple answer to your question is more buyers than sellers...
The longer version is:
1. Better C's - confidence (by investors), clarity (by regulators) and communication (by the companies themselves)
2. Lower F's - fear, frustration and fuzziness.
I'd say that currently the levels of both fear and volatility are too high to overcome the current confusion and uncertainty.
As you know, time is the best healer. This is no different.
Sit still, hold tight, remain strong and this storm shall pass.
Toofuzzy profile picture
Thanks FT

I realize AMZA is priced off the underlying. So it would be nice to see their holdings move up in price. But they pay out more than they earn also.
BartAtTheRanch profile picture
Thanks Ari - still would like to understand EXACTLY how the share creation works, esp from that phrase

"When an ETF company wants to create new shares of its fund..."

in response to my question on the net as to such share creation for ETFs. Hope you can track this down, and thanks for all your fine work in all four portfolios and elsewhere!

The Fortune Teller profile picture
Here's another MLPs-related piece:


It's the A-B-C (or AMLP...) song, the WoF version...
tjhoppe profile picture
It looks like Friday was just a "Dead Cat Bounce" for midstream.
tjhoppe profile picture
Today is the published dividend declaration date, and goes ex-dividend tomorrow.
bradlewski profile picture
EEQ is just the mgmt arm with EEP as it's sole investment.

tjhoppe profile picture
As of 11:30, AMZA is +2.06% while AMLP is +2.46%. Leverage plus options and getting their a$$ kicked by an unmanaged fund again. Really losing confidence in these guys. What the hell were they doing yesterday, running to the ladies room and puking their guts out all day?
i am out of nowhere profile picture
Do some research, please. First of all, go to their website and look up NAV at yesterday close. Then, check out closing price. Closing price was above $.05 of NAV (premium). Then look up closing price of AMLP last night. Apply 25-35% leverage to it and adjust the price by $ .05 premium.
bradlewski profile picture
EEQ getting pounded today. ~5.76% of AMZA. So, far, the rest of the basket is offsetting this.

FERC changes to hit Enbridge Energy 2018 revenue by $100M, DCF by $60M

The Fortune Teller profile picture
EEQ is one of the most affected
However, ENB is likely to change its legal structure, if an appeal won't reverse the new ruling it, to avoid the unfavorable effects.
pro8 profile picture
A slew of MLP's have come out with announcements ... mostly of little or no affect from the FERC decision...

The Fortune Teller profile picture
As expected and as you would expect
The silence of the lambs (MLPs) won't help much here against hannibal (FERC)...
Have a lovely weekend
gimmeecoffee profile picture
Looking forward to a nice bounce in the sector today, as I would think the institutional buyers will be grabbing these low shares by the boatload.
I thought my bifocals were acting up today...
i randomly switched to my account at work to see how stuff is going on my watchlist i have amza, mlpq, mlpz, ajml - all were down 10%+ i thought it was an error lol
Triple F Fred profile picture

If you moved on it, most likely a nice bonus!

pro8 profile picture
And now from KMI

Kinder Morgan Statement on Federal Energy Regulatory Commission Notice of Proposed Rulemaking on the Tax Cuts and Jobs Act

"""" We believe any action by FERC should not affect negotiated rate contracts and will not significantly impact assets that are current cash taxpayers. For those reasons, the ultimate timing and impact of any future rate adjustments, should they occur, are not expected to be material to KMI’s distributable cash flow. """"

HOUSTON--(BUSINESS WIRE)-- Kinder Morgan, Inc.(KMI) today released the following statement following the announcement by the Federal Energy Regulatory Commission (FERC):

Kinder Morgan (KMI) is aware of the FERC announcement today of a notice of proposed rule-making (NOPR) on the impact of the Tax Cuts and Jobs Act on FERC-regulated rates for natural gas and oil pipelines. As a proposed rule, it is neither final nor immediate and will be subject to a public comment process. We intend to provide comments during that process, both as an individual company and through our trade associations.

Based on the information provided today, KMI is pleased by FERC’s inclusion of an option for companies to file a statement with the FERC explaining why an adjustment to rates to reflect the Tax Act impact is not necessary. The competitive environment in which interstate natural gas transmission companies operate is vastly different from the historic “franchised utility service territory” that is still prevalent for traditional utilities. As a result, many of our rates are set pursuant to negotiated rate arrangements that we believe should not be subject to adjustment due to changes in tax law. Also, many of our current transactions are provided at discounted rates that are below maximum tariff rates, many of which would not be impacted by a change in the maximum tariff rate. Further, on many of our pipelines we are operating under rate settlements that limit changes to their terms during the life of the settlement.

We believe any action by FERC should not affect negotiated rate contracts and will not significantly impact assets that are current cash taxpayers. For those reasons, the ultimate timing and impact of any future rate adjustments, should they occur, are not expected to be material to KMI’s distributable cash flow.

Finally, with respect to FERC’s separate action eliminating the master limited partnership tax allowance, we note that KMI has been organized as a C-corporation since 2014.

Kinder Morgan, Inc. (KMI) is one of the largest energy infrastructure companies in North America. It owns an interest in or operates approximately 85,000 miles of pipelines and 152 terminals. KMI’s pipelines transport natural gas, refined petroleum products, crude oil, condensate, CO2 and other products, and its terminals transload and store petroleum products, ethanol and chemicals, and handle products such as steel, coal and petroleum coke. It is also a leading producer of CO2 that we and others use for enhanced oil recovery projects primarily in the Permian basin. For more information please visit http://bit.ly/sf6GjT.
The Fortune Teller profile picture
More to come I guess (by other MLPs)
It certainly going to make many people a lot of money
pro8 profile picture
I certainly hope so.... but just when you thought sentiment could not get worse.... that said buy when others are fearful sale when others are greedy...
gimmeecoffee profile picture
When all is said and done and cooler heads prevail, this will be just a whole lot of nothing, why it is good to average down here. Hoping I get the low 7s tomorrow when more funds clear.
but...but...but.. MY MARCH PUTS...
gimmeecoffee profile picture
lol, sorry Mac, those puts gonna have to go down!

Looks like we are seeing some kind of bounce in the sector, I think we see a nicer bounce tomorrow when the dust settles.
Trapping Value profile picture
EPD rebounding with a vengeance.
gimmeecoffee profile picture
EPD put out a press release, said a big nothing!

FERC Policy Revision to Have No Material Impact to Enterprise Financial Results
HOUSTON--(BUSINESS WIRE)--Mar. 15, 2018-- Enterprise Products Partners L.P. (NYSE:EPD) announced that revisions announced today by the Federal Energy Regulatory Commission (“FERC”) with regard to its 2005 policy for recovery of income taxes are not expected to have a material impact to the earnings and cash flow of Enterprise. The FERC announced today that it would revise its 2005 Policy Statement for Recovery of Income Tax costs so that it no longer will allow interstate pipelines owned by master limited partnerships to recover an income tax allowance in the cost of service.

“We do not expect the revisions to the FERC’s policy on the recovery of income taxes to materially impact our earnings and cash flow,” said A.J. “Jim” Teague, chief executive officer of Enterprise’s general partner. “The cost-based tariff rates that are in effect for all of our interstate pipelines are based on a cost of service for those pipelines whereby the disallowance for the recovery of an income tax allowance will not have a material effect, if any, to the posted tariffs.”

Enterprise Products Partners L.P. is one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. Our services include: natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage and import and export terminals; crude oil gathering, transportation, storage and terminals; petrochemical and refined products transportation, storage and terminals; and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems. The partnership’s assets include approximately 50,000 miles of pipelines; 260 million barrels of storage capacity for NGLs, crude oil, refined products and petrochemicals; and 14 billion cubic feet of natural gas storage capacity.

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical fact, included herein that address activities, events, developments or transactions that Enterprise and its general partner expect, believe or anticipate will or may occur in the future are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from expectations, including required approvals by regulatory agencies, the possibility that the anticipated benefits from such activities, events, developments or transactions cannot be fully realized, the possibility that costs or difficulties related thereto will be greater than expected, the impact of competition, and other risk factors included in Enterprise’s reports filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. Except as required by law, Enterprise does not intend to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: http://bit.ly/2FYFYTO

Source: Enterprise Products Partners L.P.

Enterprise Products Partners L.P.
Randy Burkhalter, (713) 381-6812 or (866) 230-0745
Investor Relations
Rick Rainey, (713) 381-3635
Media Relations
The Fortune Teller profile picture
I wonder how many MLPs are going to hold press release/conference calls as well .They should!
tjhoppe profile picture
Afternoon of March 15. I was just handed my bonus check for 2017 (the company that I work for always makes us wait to the last possible payment date). Tempted to blow it all on AMZA.
The Fortune Teller profile picture
Congrats on the bonus
Hope you'll invest it wisely.
pro8 profile picture
Its the end of the world

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