Ciner Resources (CINR) is one of those partnerships with a small exposure to the public that generally does not make waves. Sometimes unpleasant waves rule the day. This year, the President resigned after a distribution cut and the partnership has shown some negative earnings comparisons. This market does not tolerate those results regardless of the reasons because the current market is used to unrealistic gains from growth stocks and story stocks. The income crowd abandoned this partnership in droves after the dividend cut which provides an opportunity for investors who realize the current situation will pass.
Partnership Stock Price
This partnership issues K-1s. That appeals to some investors. However, the overall news the last few months has decimated the price of the partnership units. Now, though the price is low enough that should the partnership go private because of the low price, investors would benefit from both the distribution and the offer (likely at a premium) to go private.
Source: Seeking Alpha Website October 17, 2019
These units had been in a slow recovery to the initial announcement of a distribution decrease when the President resigned. That President had been at the helm since this partnership went public. Clearly the market did not accept the leadership change very well. However, change is inevitable.
In the meantime, management estimated about 9 quarters of a distribution decrease was needed to complete a capital expansion program. This partnership is conservatively managed with debt levels around one times EBITDA. Management chose to reduce the distribution rather than leverage the partnership more.
That choice usually guarantees that debt markets will be available to the partnership at very reasonable terms in even the worst economic downturns.
Partnership Structure
The worries about the resignation of the President on the effect of the partnership appear to be overblown.
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