This Knight Is Ready To Battle Back


  • Blueknight Energy Partners is an undercovered name that has a been a disaster for its investors.
  • Are other investor's severe losses a source of potential returns for this unloved knight?
  • The company is improving its fiscal house and although the charts are scary, there is evidence of stabilization in recent weeks.
  • Governments need to fix their roads and they need asphalt to do it.
  • We expect the stock to battle back thanks to a much better 2019 and as such contend the market should start baking these realities into the stock price soon.
  • This idea was discussed in more depth with members of my private investing community, BAD BEAT Investing. Start your free trial today »

Blueknight Energy Partners (NASDAQ:BKEP) has a been a disaster for its investors. For a little bit of the back story, we will point out that earlier in the year the company had plans to cut the dividend by approximately 30%. This was discussed Q1 2018 earnings report. As if that was not enough to hit the stock hard, it turned out to be a much worse 45% cut to the distribution. Cut nearly in half! As we have continued to move forward, the stock has faced additional pressure as investor concerns have mounted over declining margins in certain business lines.

Source: Blueknight

What do we mean by such pressures? Well, while the company's asphalt terminal business continues to perform well, margins have declined for the Cushing oil terminals side of the business. The oil market, which we follow somewhat moderately given our recommendations in other stocks like HollyFrontier (HFC), Exxon (XOM) and Royal Dutch Shell (RDS.A) (RDS.B), has had some issues with contracts and futures pricing. They have entered a state of backwardation, and that hurts the forward prospects for a partnership like Blueknight, at least in some lines of the business, which we discuss a bit more below.

Blueknight Energy Partners has lost more than half of its value in 2018. In or opinion, this is overdone. We also think the stock is set to stabilize here. Even though the chart is ugly, it appears the stock is trying to find solid footing after all of this time. The 5-year, two-year, and 6 month charts are scary, but the latter shows stabilization is occurring.

5-year chart:

Source: BAD BEAT Investing

2-year chart:

Source: BAD BEAT Investing

And the 6 month chart, where we have traced some action:

Source: BAD BEAT Investing

Here we are seeing just a disgusting series

Our half-off annual discount for new members is ending: Join a community of day traders and value hunters

Our 53% annual discount period ends soon. Price doubles after that. Get our highest conviction rapid-return trade ideas for ~$1 a day. Be a winner.

What we do for you:

Find beaten-down stocks and profit from their reversals.

2-3 swing trades a week, monthly deep value plays.

Guided entry and exits.

Open discussions of ideas with seasoned traders

This article was written by

Quad 7 Capital profile picture
The #1 service for high performing trades run by active hedge fund analysts

We have turned thousands of losing investors into WINNERS. We are the team behind the top performing trading service BAD BEAT Investing. Quad 7 Capital was founded in 2017 by a team that consists of a long time investor, health researcher, financial author, professor, professional cardplayer, and hedge fund analysts.

The BAD BEAT Investing service is a specialized carve out of  Quad 7 Capital and launched in 2018. The service is run by a team of hedge fund analysts. This a top performing Marketplace service relative to market returns. It is focused on trading opportunistic inflections, and leveraging mispriced stocks and momentum driven events for rapid-return swing trades, options education, and long-term investments. Further, it offers a direct access line to our traders all day during market hours.

Quad 7 Capital as a whole has expertise in business, policy, economics, mathematics, game theory and the sciences. The company has experience with government, academia, and private industry, including investment banking, boutique trading firms, and hedge funds. We offer market opinion and analysis, and we cover a wide range of sectors and companies, with particular emphasis on news related items and analyses on growth companies, dividend stocks, banks/financials, industrials, cryptocurrencies, mREITS, biotechnology/ pharmaceuticals, precious metals, and small-cap companies.

If you want to win, follow us, and if you want to make money, sign up to BAD BEAT investing today. 

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in BKEP over the next 72 hours. 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.

Recommended For You

Comments (95)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.