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RNO could be a coal gem for MLP investors

|Includes: ARLP, NRP, Rhino Resource Partners LP (RNO), WLB

 Reading presentation of this recent MLP IPO in coal from Raymond James conference.

first off, the name seems off peoples radar screens versus OXF or NRP which have good fundamentals but less DCF coverage and some hair on them.

RNO projected 100m ebitda for sept 2011 annual with 77% of coal contracted out for the yr leaving some upside to numbers i would think given coal prices have gone up alot.  also gives them room to contract strong 2012 rates.

DCF coverage is a huge 1.7x for minimum distribution of $1.78 per yr.  they have expansion capex of 30m roughly they think which should add to future growth but also will be financed with proceeds from IPO and/or they have very lower debt to ebitda of 0.6x it says.  

the stock is $23.50 or so, so 7.50% yield but would expect during 2011 them to normalize higher their distribution levels given 1.7x coverage is way too high even if doing expansion capex (which can be mix debt and equity down the road in 2012 and fwd).

oxf and nrp with much lesser coverage ratios are around 7% yield.

i think this RNO catches a move to high 20s in the new yr is my investment thesis and we can OWN for a long time and see higher distributions