I've been a busy boy today---in between donkey and pony chores.
I've been adding NGL all morning, now holding 700 more units than at Friday's close.
Position (s) now stand thusly:
Units held across four accounts-------------- 13,500
Cost basis for all of the above--------------$13.58
While I'm underwater to the tune of $22,100 or so, I'm not in the least concerned with this pick. The recent drop in perceived valuation is so off base, it's almost funny to everything but my wallet. Fortunately I have no wish or need to raise cash by liquidating anything so I'm building for the future. As a cancer survivor told I had 12-18 months to live---bedridden, at that, four years ago--- building for a future is no simple matter. Fortunately I'm off the hi-danger list for recurring cancer issues. So I'm eager to live in the moment.
NGL is having a terrible time of things but not because of poor execution, mind you; rather, it's largely because people don't understanding the nature of logistics orientation. And they don't get the bigger picture in terms of how NGL operates, why it does as it does and even how it makes money. And then there's the simple fact here---the company constantly reviews its success, its positions within individual segments of the industry and then looks to implement new measures designed to alleviate pressures within so as to become accretive.
This is why I've gone from 12,800 units last week to 13,500 as of this moment. The price of crude has nearly NOTHING to do with the valuation attributed to NGL. They get paid for the amount of oil carried through their pipelines. That amount doesn't directly correlate to the price of oil in a barrel nor will it be reflected by the price you and I pay at the pump. If you're a refiner or otherwise involved in oil, condensates and gasoline, you will need pipelines to carry your product. You want to transport it? NGL gets it done. That means that if oil is $60 or $40, they get the same rate as it's based on volumetrics.
End of speech. lol If only people understood how this works, they'd be piling on for more than 13% ROI and this is BEFORE some of the projected distribution increases!
I seldom find opportunities such as this one.
Good fortune, everybody!
