Natural Resource Partners: Royalties With Protected Downside

Deiya Pernas, CFA
996 Followers

Summary

  • Natural Resource Partners is an MLP that owns the mineral rights to roughly 13mm acres in the Appalachia Basin and Wyoming.
  • The majority of Natural Resource Partners' coal revenue comes from metallurgical coal, a much more resilient revenue stream than thermal coal.
  • Given the low-cost business of collecting royalties with a protected downside  along with potential growth drivers, we believe Natural Resource Partners has an upside of at least 30%.
Coal and the hands of a miner, Concept, the rising price of coal, Hard mining and industrial work

Andrzej Rostek

Natural Resource Partners (NYSE:NRP) is an MLP that owns the mineral rights to roughly 13mm acres in the Appalachia Basin and Wyoming. Currently, their primary natural resources are thermal and metallurgical coal. Given the low-cost business of collecting royalties with a protected

This article was written by

996 Followers
Deiya Pernas is a former Deputy Chief Investment Officer of a 3.5 billion dollar investment manager. His area of expertise lies in constructing forward-looking views of equities that go against prevailing market perception. Pernas Research is the company he co-manages with his brother, Dean. Over the past three and five-year periods, they have consistently outperformed market averages. Additional research and their published track record can be found at Pernas Research. At Pernas Research, their research philosophy is firmly grounded in the investment strategy they have refined throughout their careers. Their primary focus is on identifying attractively-priced companies that fall into two categories: those with the potential to sustain and expand their future cash flows, and those with cash flows that require improvement but possess a clear path to recovery....Education: University of California, Berkeley | BA Economics....INVESTMENT DISCLAIMERS & INVESTMENT RISKS....Past performance is not necessarily indicative of future results. All investments carry significant risk and all investment decisions of an individual remain the specific responsibility of that individual. There is no guarantee that our research, analysis, and forward-looking price targets will result in profits or that they will not result in a full loss or losses. All investors are advised to fully understand all risks associated with any kind of investing they choose to do.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of NRP either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

INVESTMENT DISCLAIMERS & INVESTMENT RISKS Past performance is not necessarily indicative of future results. All investments carry significant risk and all investment decisions of an individual remain the specific responsibility of that individual. There is no guarantee that our research, analysis, and forward-looking price targets will result in profits or that they will not result in a full loss or losses. All investors are advised to fully understand all risks associated with any kind of investing they choose to do.

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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