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Bob Cecchini
Igor,
Could you please tell me whether or not AMZA should best be held in a tax advantaged account?
Thank you,
Igor Greenwald
I will continue to argue that AMZA should simply not be held. Their distributions don’t seem to correlate to the income thrown off by their portfolio. That said, it shouldn’t present the same problems in a tax-deferred account that an MLP would. Just realize they’re already paying income taxes at the fund level.
Guest
You can argue until the cows come home but they’ve really made their dividend for a minimum of five straight quarters now.
Do you have any insights into how they can provide a 19% yield while trading over NAV and incurring fund-level taxes on their income? Or are you just taking it on faith that they will continue to distribute much more than they earn?
any date yet for your 2017 ideas? would love to see what ya’ll have in mind for the new year.
Lots going on -thankfully looking better than last couple of years-
Thank you.
Robert Rapier
I am going to publish 2017 predictions early next week.
It’s a lot to digest, but I think at 8x EBITDA with most of the price paid by transferring debt the multiple is fair. The midpoint of the new ’17 forecast is just shy of what’s needed to support the current distribution, so the $100 million annual backstop provided by the GP through 2019 is an important security blanket. Whenever a deal like this goes down you have to wonder why the seller is in a hurry to drop down everything, but in this case the awkward joint venture in the GP role might explain it. It could possibly serve as a prelude for the consolidation of the GP interest with Phillips 66 and conceivably for the new DPM’s eventual merger with PSXP, I suppose. That would be one way to get that yield down. No change to our recommendation to wait for dips below $36 before buying more. At 36, the annualized yield would be nearly 8.7%, vs. the current 8.4%.
Looks like ETP got a 3 Billion$ cash infusion. Blackstone, Igor?
The 8k is on the energytransfer website.
Igor Greenwald
I don’t think this has anything to do with Blackstone, rather this seems to be a mechanism for offering affiliates a pretty fairly priced perpetual preferred for their cash and/or units. Yield is 7.5%, but distributions can be deferred for an additional 1.5% annually on the deferred balance. Didn’t even warrant a press release, apparently.
Seems like there’s some major FERC problems in regards to Rover. This is something that was supposed to be half in service by mid year yet they seem to be months away at a minimum to even getting FERC clearance.
I’m a pretty big ETE holder and I don’t intend on selling however I think there may be some hard surprises coming soon hence the recent financial engineering. The thing that happened Monday was most likely so ETP could pay their distribution and so ETE could pay theirs. Next quarter they should be combined with SXL so maybe it will get a little easier but if these projects keep getting stalled like this I fear they may have to start selling things they don’t want to sell.
Just my two cents and I have over 25k shares not to mention another 25k shares AMZA which is heavily Energy Transfer.
Trump hopefully to the rescue but this won’t happen overnight. Hopefully Trump wants to make a statement and immediately gives the go ahead to DAPL. That would be huge. Or Huuuuuuuuuuge. Or Bigly.
Igor Greenwald
I think Energy Transfer’s Rover filing was meant to light the proverbial fire under the FERC staff, whose increasing scrutiny of pipeline companies and their projects has been noted. Still expect Rover to be completed this year but even a delay until next year wouldn’t have a huge effect on ETE revenue or valuation.
January 3, 2017 at 6:12 PM EST
I am going to publish 2017 predictions early next week.
OK, Today is January 17th, I haven’t seen anything yet.
Did you mean at the end of the month?
Just interested, maybe after Trump gets sworn in.
Thanks-Stan Z
Igor
Any update on ETE’s court appeal, I believe scheduled for today, to block the Army Corp of Engineers move to launch a full environmental impact study on the DAPL crossing.
What do you believe will be the outcome of this delay and when do you think it will occur.
Thanks
Mark
Guest
The judge is letting the Corps proceed with their study. ONE MORE DAY AND THIS BUM IS OUT OF OFFICE!!!
Energy Transfer failed to get a judge to halt the time-consuming full Environmental Impact Study but it will be a whole new ballgame as of today and I expect the Army Corps of Engineers to get different marching orders soon. The litigation will continue but it will be the tribe and environmentalists rather than the company suing the government to change its policy soon.
Robert in his 1/17 Energy Letter “Power Grab for Coal” makes me wonder if we should buy back our two Alliance plays that we “sold half” a month or so ago. Your thoughts!
Thanks,
Kent
Igor Greenwald
So the standard way for we deal with these Sell Half calls for portfolio tracking purposes is that at the start of the new year the ratings go back to Hold because a permanent Sell Half makes no sense. The new issue out Monday will recommend more attractive (albeit also riskier) coal plays than the Alliance ones.
Trump will have zero impact on DAPL . Don’t kid yourself . 2 year delay will impact ETE DCF . I am dumping ETE and KMI today and reinvesting . The financial engineering and executive scamming is just gone too far with Kelcy and Rich . Oil is going to be cheap and available for a long time . So is natural gas . Blackstone backed away from ETE and so am I . I have a nice profit and I can always come back after the cash starts to flow back to the unit holders . What say you Igor ?
Igor Greenwald
Well, I think you know I disagree. I think DAPL will be running this year but in any case that doesn’t make or break the long-term case for Energy Transfer.
President Trump plans to sign executive orders reviving the Keystone XL and Dakota Access pipelines, which had been stalled under the Obama administration
Have a good day !
Tom Light
Igor Greenwald
Yes, not surprise of course but excellent news and a good decision.
Curious about IEP. Recall it was onece in a portfolio, then it spiked and you recommended SELL half. Is this a buy in your view under $60?
Igor Greenwald
We did well to recommend buying and selling it when we did, but I doubt we’ll be going back to that well. There’s a price for everything, but I can’t really justify doing research on whether IEP there right now. Off the top of my head, I doubt it. Carl Icahn looks out for Carl Icahn, has had really terrible investment results of late and yet some of his shine as Trump friend and adviser is probably in the price of a security that’s only held by retail investors besides Carl, really. Investing alongside him in CVI, which sends him checks, makes sense to me. In IEP, not so much.
Igor two items
I recall you had EQGP on your best buy list, now it appears only EQT remains??
also
In December you had a good summary and outlook for TLLP, they recently increased their distribution and it is now above your $55 buy limit. Would you consider increasing the buy limit??
Igor Greenwald
EQGP significantly outperformed EQT over the last month or so, and didn’t make the Best Buys cut for that reason rather than because anything’s changed in my opinion of it. Tesoro Logistics has been pretty much straight up since we got in two months ago, and while that’s great I don’t think this is the best time to buy more; would rather let it settle down and base a little.
WASHINGTON – Senator John Hoeven issued the following statement after speaking today with Vice President Pence and Acting Secretary of the Army Robert Speer:
“Today, the Acting Secretary of the Army Robert Speer informed us that he has directed the Army Corps of Engineers to proceed with the easement needed to complete the Dakota Access Pipeline. This will enable the company to complete the project, which can and will be built with the necessary safety features to protect the Standing Rock Sioux Tribe and others downstream.
“Building new energy infrastructure with the latest safeguards and technology is the safest and most environmentally sound way to move energy from where it is produced to where people need it.
“We are also working with the Corps, the Department of Justice, the Department of Interior and the Department of Homeland Security to secure additional federal law enforcement resources to support state and local law enforcement. On Sunday, 20 additional Bureau of Indian Affairs law enforcement officers arrived at Standing Rock to assist local authorities. Also, the Standing Rock Sioux Tribal Council has asked the protesters to leave the campsite on Corps land.
“This has been a difficult issue for all involved, particularly those who live and work in the area of the protest site, and we need to bring it to a peaceful resolution.”
Igor Greenwald
Well, not really over, but Energy Transfer now gets to finish the pipeline and the feds get to defend its right to do so in the continuing court battle. Which could last years, but the oil will flow.
Stock Talk
Bob Cecchini
Igor,
Could you please tell me whether or not AMZA should best be held in a tax advantaged account?
Thank you,
Igor Greenwald
I will continue to argue that AMZA should simply not be held. Their distributions don’t seem to correlate to the income thrown off by their portfolio. That said, it shouldn’t present the same problems in a tax-deferred account that an MLP would. Just realize they’re already paying income taxes at the fund level.
Guest
You can argue until the cows come home but they’ve really made their dividend for a minimum of five straight quarters now.
http://etfs.morningstar.com/distribution?t=AMZA®ion=usa&culture=en-US
You can also go to their website and find every trade they currently have including all options.
http://www.infracapmlp.com/fund-overview.html
Igor Greenwald
Do you have any insights into how they can provide a 19% yield while trading over NAV and incurring fund-level taxes on their income? Or are you just taking it on faith that they will continue to distribute much more than they earn?
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pipeline
igor
growth portfolio has Archrock Partners as issuing 1099, not k-1??
Robert Rapier
Archrock does issue a K-1, so we will get that fixed. Thanks for the heads up.
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Tom Light
any date yet for your 2017 ideas? would love to see what ya’ll have in mind for the new year.
Lots going on -thankfully looking better than last couple of years-
Thank you.
Robert Rapier
I am going to publish 2017 predictions early next week.
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Igor Greenwald
And of course we’ll have New Buys, and probably a new Best Buys list, in the January issue out in two weeks
Tom Light
Look forward to the New Buy and new best buy list- Lots going on in the MLP space
Sincerely-
Tom
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pipeline
Igor
any comment on DPM news we got today?
Igor Greenwald
It’s a lot to digest, but I think at 8x EBITDA with most of the price paid by transferring debt the multiple is fair. The midpoint of the new ’17 forecast is just shy of what’s needed to support the current distribution, so the $100 million annual backstop provided by the GP through 2019 is an important security blanket. Whenever a deal like this goes down you have to wonder why the seller is in a hurry to drop down everything, but in this case the awkward joint venture in the GP role might explain it. It could possibly serve as a prelude for the consolidation of the GP interest with Phillips 66 and conceivably for the new DPM’s eventual merger with PSXP, I suppose. That would be one way to get that yield down. No change to our recommendation to wait for dips below $36 before buying more. At 36, the annualized yield would be nearly 8.7%, vs. the current 8.4%.
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Guest
Looks like ETP got a 3 Billion$ cash infusion. Blackstone, Igor?
The 8k is on the energytransfer website.
Igor Greenwald
I don’t think this has anything to do with Blackstone, rather this seems to be a mechanism for offering affiliates a pretty fairly priced perpetual preferred for their cash and/or units. Yield is 7.5%, but distributions can be deferred for an additional 1.5% annually on the deferred balance. Didn’t even warrant a press release, apparently.
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Guest
Seems like there’s some major FERC problems in regards to Rover. This is something that was supposed to be half in service by mid year yet they seem to be months away at a minimum to even getting FERC clearance.
I’m a pretty big ETE holder and I don’t intend on selling however I think there may be some hard surprises coming soon hence the recent financial engineering. The thing that happened Monday was most likely so ETP could pay their distribution and so ETE could pay theirs. Next quarter they should be combined with SXL so maybe it will get a little easier but if these projects keep getting stalled like this I fear they may have to start selling things they don’t want to sell.
Just my two cents and I have over 25k shares not to mention another 25k shares AMZA which is heavily Energy Transfer.
Trump hopefully to the rescue but this won’t happen overnight. Hopefully Trump wants to make a statement and immediately gives the go ahead to DAPL. That would be huge. Or Huuuuuuuuuuge. Or Bigly.
Igor Greenwald
I think Energy Transfer’s Rover filing was meant to light the proverbial fire under the FERC staff, whose increasing scrutiny of pipeline companies and their projects has been noted. Still expect Rover to be completed this year but even a delay until next year wouldn’t have a huge effect on ETE revenue or valuation.
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StanZ
January 3, 2017 at 6:12 PM EST
I am going to publish 2017 predictions early next week.
OK, Today is January 17th, I haven’t seen anything yet.
Did you mean at the end of the month?
Just interested, maybe after Trump gets sworn in.
Thanks-Stan Z
Guest
I got an email with his predictions last week….
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Igor Greenwald
Here’s a link to Robert’s annual predictions story in The Energy Letter: http://www.investingdaily.com/29908/hot-year-in-store-for-energy/
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Mark Drum
Igor
Any update on ETE’s court appeal, I believe scheduled for today, to block the Army Corp of Engineers move to launch a full environmental impact study on the DAPL crossing.
What do you believe will be the outcome of this delay and when do you think it will occur.
Thanks
Mark
Guest
The judge is letting the Corps proceed with their study. ONE MORE DAY AND THIS BUM IS OUT OF OFFICE!!!
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Igor Greenwald
Energy Transfer failed to get a judge to halt the time-consuming full Environmental Impact Study but it will be a whole new ballgame as of today and I expect the Army Corps of Engineers to get different marching orders soon. The litigation will continue but it will be the tribe and environmentalists rather than the company suing the government to change its policy soon.
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Kent
Robert in his 1/17 Energy Letter “Power Grab for Coal” makes me wonder if we should buy back our two Alliance plays that we “sold half” a month or so ago. Your thoughts!
Thanks,
Kent
Igor Greenwald
So the standard way for we deal with these Sell Half calls for portfolio tracking purposes is that at the start of the new year the ratings go back to Hold because a permanent Sell Half makes no sense. The new issue out Monday will recommend more attractive (albeit also riskier) coal plays than the Alliance ones.
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TC Investments
Trump will have zero impact on DAPL . Don’t kid yourself . 2 year delay will impact ETE DCF . I am dumping ETE and KMI today and reinvesting . The financial engineering and executive scamming is just gone too far with Kelcy and Rich . Oil is going to be cheap and available for a long time . So is natural gas . Blackstone backed away from ETE and so am I . I have a nice profit and I can always come back after the cash starts to flow back to the unit holders . What say you Igor ?
Igor Greenwald
Well, I think you know I disagree. I think DAPL will be running this year but in any case that doesn’t make or break the long-term case for Energy Transfer.
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Guest
http://www.climatedepot.com/2017/01/20/all-references-to-climate-change-deleted-from-white-house-website-at-noon-today/
Read this entire link and tell me he’s going to have zero impact on DAPL.
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Gayle Koch
When are you going to publish a new newsletter?
Guest
He said Monday.
Tom Light
It is Monday- and a new newsletter would be appreciated-It’s the 23rd of the month?
Beyond frustrated-
Guest
Don’t shoot the messenger. I don’t disagree.
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Igor Greenwald
Here it is, sorry for the delay. There was an awful lot of ground to cover with implications for the next year with Best Buys versus just the next couple of days. https://www.investingdaily.com/mlp-profits/articles/30014/starting-the-year-right/
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Gayle Koch
By Monday, you mean today, Jan 23? Well, I can’t find it and there has not been a newsletter since Dec 9!!!!
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Igor Greenwald
And by Monday I obviously meant Tuesday; thank you for your patience and for sharing the info.
https://www.investingdaily.com/mlp-profits/articles/30014/starting-the-year-right/
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Igor Greenwald
It’s here, thanks for waiting: https://www.investingdaily.com/mlp-profits/articles/30014/starting-the-year-right/
Also, the December newsletter came out on Dec. 21 despite the earlier issue date.
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Tom Light
President Trump plans to sign executive orders reviving the Keystone XL and Dakota Access pipelines, which had been stalled under the Obama administration
Have a good day !
Tom Light
Igor Greenwald
Yes, not surprise of course but excellent news and a good decision.
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James Martino
Curious about IEP. Recall it was onece in a portfolio, then it spiked and you recommended SELL half. Is this a buy in your view under $60?
Igor Greenwald
We did well to recommend buying and selling it when we did, but I doubt we’ll be going back to that well. There’s a price for everything, but I can’t really justify doing research on whether IEP there right now. Off the top of my head, I doubt it. Carl Icahn looks out for Carl Icahn, has had really terrible investment results of late and yet some of his shine as Trump friend and adviser is probably in the price of a security that’s only held by retail investors besides Carl, really. Investing alongside him in CVI, which sends him checks, makes sense to me. In IEP, not so much.
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pipeline
Igor two items
I recall you had EQGP on your best buy list, now it appears only EQT remains??
also
In December you had a good summary and outlook for TLLP, they recently increased their distribution and it is now above your $55 buy limit. Would you consider increasing the buy limit??
Igor Greenwald
EQGP significantly outperformed EQT over the last month or so, and didn’t make the Best Buys cut for that reason rather than because anything’s changed in my opinion of it. Tesoro Logistics has been pretty much straight up since we got in two months ago, and while that’s great I don’t think this is the best time to buy more; would rather let it settle down and base a little.
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Guest
It’s finally over……
WASHINGTON – Senator John Hoeven issued the following statement after speaking today with Vice President Pence and Acting Secretary of the Army Robert Speer:
“Today, the Acting Secretary of the Army Robert Speer informed us that he has directed the Army Corps of Engineers to proceed with the easement needed to complete the Dakota Access Pipeline. This will enable the company to complete the project, which can and will be built with the necessary safety features to protect the Standing Rock Sioux Tribe and others downstream.
“Building new energy infrastructure with the latest safeguards and technology is the safest and most environmentally sound way to move energy from where it is produced to where people need it.
“We are also working with the Corps, the Department of Justice, the Department of Interior and the Department of Homeland Security to secure additional federal law enforcement resources to support state and local law enforcement. On Sunday, 20 additional Bureau of Indian Affairs law enforcement officers arrived at Standing Rock to assist local authorities. Also, the Standing Rock Sioux Tribal Council has asked the protesters to leave the campsite on Corps land.
“This has been a difficult issue for all involved, particularly those who live and work in the area of the protest site, and we need to bring it to a peaceful resolution.”
Igor Greenwald
Well, not really over, but Energy Transfer now gets to finish the pipeline and the feds get to defend its right to do so in the continuing court battle. Which could last years, but the oil will flow.
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