Valuentum Exclusive Analysis for the Discerning Investor

GasLog MLP Family Highlights Problems with Flawed Model
Image Source: GasLog Ltd - 2018 Analyst Day Presentation. We’ve written about it many times in the past and we’re writing about it again: the master limited partnership (‘MLP’) model is fundamentally broken. Equity holders in this arrangement have little to no say over how the family of companies are run, and management is often beholden to no one. Only by converting to a C-Corp can this arrangement be rectified. Recently, the LP GasLog Partners cut its per unit distribution by 78% sequentially after reporting fourth quarter and full year earnings for 2019. Now the LP’s distribution stands at $0.50 per unit on an annualized basis. Equity holders got crushed on February 6, 2020, with GLOG ending down 9% and GLOP falling by a whopping 49%. This follows two other high profile cuts recently, at Alliance Resource Partners and Martin Midstream Partners.

Jan 31, 2020

Dividend Increases/Decreases for the Week Ending January 31
Let's take a look at companies that raised/lowered their dividend this week.

Nov 13, 2019

Chesapeake Energy’s Pain Indicates Nothing “Safe” About Energy MLP Distributions
Image Source: Valuentum slide deck, December 2015. Valuentum released its bearish case on MLPs in June 2015. Summary There is nothing "safe" in the stock market, and given the track record of the distributions of pipeline MLPs, there is nothing "safe" about pipeline MLP distributions. The MLP business model continues to be phased out, a trend that we anticipated when we made our bearish call on the group in June 2015. Chesapeake Energy's pain is a yet another reminder of the pipeline MLP group's exposure to energy resource pricing through the health (or rather ill-health) of its customer base. We continue to encourage pipeline operators to disclose free cash flow (cash flow from operations less all gross capital spending) prominently in press releases, alongside other industry-specific metrics. Investors of Chesapeake could get completely wiped out in a Chesapeake bankruptcy, and this could have implications across the pipeline MLP arena.

Aug 7, 2019

Tallgrass Energy’s Growth Runway Shorter Than Expected
Image Source: Tallgrass Energy LP -- IR Presentation. We parted with Tallgrass as we see greater opportunities in other midstream firms and different parts of the high-yield universe, such as Enterprise Products Partners, which have stronger growth runways and assets that better cater to the ever-evolving needs of North America’s oil & gas industry. Recent weakness in TGE indicates the market is losing faith in Tallgrass’ growth trajectory and its future free cash flows.

Apr 26, 2019

Dividend Increases/Decreases for the Week Ending April 26
Let's take a look at companies that raised/lowered their dividend this week.

Jul 7, 2017

MLP Speak: A Critique of Distributable Cash Flow
Let’s talk about a controversial metric that is used in master limited partnership (MLP) reporting. Just how useful is it, and should it be allowed?

Oct 31, 2016

Are S&P 500 Stocks Returning Too Much Cash to Shareholders?
S&P 500 companies are on pace to return a record amount of capital to shareholders via dividends and share repurchases, but what are the investment implications? Let’s take a look.

Oct 31, 2016

Dividend Increases/Decreases for the Week Ending October 28
Let's take a look at companies raising/lowering their dividends this week.

Oct 25, 2016

Taxes and the Distressed MLP Investor
“Perhaps the worst thing about MLPs is that investors can spend more time doing and thinking about tax-related items than actually evaluating the businesses of the underlying entities. This could result in poor investment decisions.” – Brian Nelson, CFA

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Valuentum Exclusive Analysis for the Discerning Investor