PAA

GasLog MLP Family Highlights Problems with Flawed Model

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Image Source: GasLog Ltd – 2018 Analyst Day Presentation By Callum Turcan 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. Massive Payout Cut As you can see in the graphic below, the ownership structure of GasLog Ltd (GLOG), the general partner (‘GP’), and GasLog Partners LP (GLOP), the limited partner (‘LP’), is quite convoluted. This MLP family leases own vessels that transport liquified natural gas (‘LNG’) and … Read more

Resetting Your Mental Model

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Image Source: affen ajlfe A version of this article was originally published on our website October 6, 2013. Having the right mental model and using the right information can be the reason why you win or lose in investing. “What is the definition of timeliness? Many believe it is getting information to investors as quickly as possible after an event, or updating something every single day or week for immaterial information. I believe in a different definition of timeliness. I believe timeliness is using all information available in a mosaic approach to accurately predict the event before it even happens. Take Kinder Morgan as the latest example. We were the only ones predicting what was going to happen before it did. To investors, … Read more

Improving Our Coverage

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Valuentum continues to scour the stock market for new ideas. We’ll be following the set of companies in this list via commentary on our website and a data sheet updated periodically. By Valuentum Analysts The list of companies in the download below were previously covered by our team via 16-page report and dividend report fashion. Going forward, we are now covering these companies with commentary on the website and via a data sheet updated periodically. This will be a much better use of members’ time, especially as members scour our Best Ideas Newsletter, Dividend Growth Newsletter, stock methodology, dividend methodology, and the hundreds of stock valuation reports and dividend reports on our website, available through the Symbol search box.  We … Read more

Chesapeake Energy’s Pain Indicates Nothing “Safe” About Energy MLP Distributions

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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 … Read more

Tallgrass Energy’s Growth Runway Shorter Than Expected

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Image Source: Tallgrass Energy LP – IR Presentation By Callum Turcan Valuentum’s High Yield Dividend Newsletter portfolio parted ways with Tallgrass Energy LP (TGE) on August 1, as we wanted to reduce our exposure to the midstream space. We don’t like TGE as much as we once did and think it’s best to move on to better opportunities. Please note Blackstone Group Inc (BX), through affiliates of Blackstone Infrastructure Partners, closed its purchase of Tallgrass’ general partner in March 2019 which included those parties acquiring a 44% economic interest in Tallgrass. In 2018, Tallgrass reorganized as a C-Corp which we were very supportive of. Additionally, the midstream company has been very free cash flow positive historically (when defined as net … Read more

Kinder Morgan Modestly Disappoints But Its Problems Are Transitory

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Image Shown: Kinder Morgan Inc expects a lot of organic growth opportunities will be generated via surging domestic demand for natural gas and rising natural gas export capacity in the US. Image Source: Kinder Morgan Inc – IR Presentation By Callum Turcan Natural gas pipeline giant Kinder Morgan Inc (KMI), a holding in our simulated Dividend Growth Newsletter portfolio, reported second quarter earnings for 2019 on July 17 which generally disappointed. Problems at its Elba LNG development in Georgia and weaker realized prices for raw energy resources produced by its upstream CO2 segment held down Kinder Morgan’s financial performance. We appreciate Kinder Morgan’s focus on fiscal discipline and see several of its problems as transitory, other than the raw energy … Read more

Dividend Increases/Decreases for the Week Ending April 12

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Below we provide a list of firms that raised their dividends during the week ending April 12. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Antero Midstream (AM): now $0.3025 per share quarterly dividend, was $0.164. Bed Bath & Beyond (BBBY): now $0.17 per share quarterly dividend, was $0.16. Clough Global Allocation Fund (GLV): now $0.1034 per share monthly dividend, was $0.1032. Clough Global Equity Fund (GLQ): now $0.1137 per share monthly dividend, was $0.1123. Clough Global Opportunities Fund (GLO): now $0.0893 per share monthly dividend, was $0.0882. Enterprise Products Partners … Read more

S&P Global: “Enterprise’s shift on cash flow reflects ‘metamorphosis’ of US pipeline firms”

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S&P Global: “While several major U.S. energy pipeline companies spent 2018 shedding cash-leaking habits and forging a more conventional financial structure as stocks languished, adopting reporting practices that are more accessible to the investing public could be a gradual process for the industry, if it takes flight at all.” S&P Global: “Enterprise’s shift on cash flow reflects ‘metamorphosis’ of US pipeline firms” Click here to read the article. Tickerized for holdings in the Alerian MLP ETF (AMLP). Pipelines – Oil & Gas: BPL, DCP, ENB, EPD, ET, GMLP, HEP, KMI, MMP, NS, PAA, WES —– Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not … Read more

MLPs Starting to Adopt Free Cash Flow?

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Image shown: Since mid-June 2015, the price of an ETF tracking the midstream MLP energy space (AMLP) has fallen more than 40% while the S&P 500 (SPY) has rallied more than 30%. No changes to simulated newsletter portfolios. By Brian Nelson, CFA Hi everyone! Hope you are having a nice start to the week. I have some great news for investors. In my lengthy piece from last Tuesday, which can read here, I talked about how master limited partnerships (MLPs) may be starting to embrace the very important metric free cash flow. If you remember, free cash flow is generally calculated as cash flow from operations less allcapital spending.  On the other hand, distributable cash flow, or the most widely-disseminated metric across midstream equities, generally excludes growth capital … Read more

Kinder Morgan Reiterates Dividend Growth Intention

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Image shown: Kinder Morgan’s pipeline network and estimated breakdown of 2018 EBDA. Source: Kinder Morgan investor presentation Pipeline operator Kinder Morgan has benefited from a significant increase in natural gas supply and demand of late, and it expects more of the same in 2019. Management continues to execute on its capital allocation priorities, and it reiterated previously-announced guidance for dividend growth in the years ahead.  By Kris Rosemann 2018 was a transformative year for Kinder Morgan (KMI). The once-troubled pipeline operator has come a long way in terms of capital allocation since its massive dividend cut in late 2015, but management continues to expect significant growth in the payout in the years ahead. The company’s growth in 2018 (fourth quarter … Read more