Volume today exceeded twice recent volume numbers upon session closing.
We rose 39 cents after traveling much higher throughout the day. This effectively separates day traders from real "players." However, I wish no insult for day traders as they are very important to me when it comes to reading signs of imbalances within the trading session. And make no mistake here: Analysis is all about imbalances when it comes to understanding trading patterns. Markets are always poised at understanding perceived imbalances for it is those imbalances that identify north or south, so to speak.
We can see today tacked on 39 cents to our unit price. Is it too much to be sustained throughout the rest of the week?
Perhaps so. However, it strongly suggests that a lot of investors are prepared and ready to exercise their judgment call when it comes to investing in ALDW. Had we risen just a few cents, it'd be business as usual for we accustomed to such daily fluctuations. This time it was more convincing, though and that tells me there's pent up pressure within the stock. And the only way for it to go now is higher. Where will it go?
I'm "feeling" $12.35 in the short term. It may take a month or it could be just a couple of weeks. But I believe it's going to happen and well before guidance explaining the BOD's declaration of yield for the second quarter of this year.
Asphalt is big business. Unfortunately it accounts for no more than 10% of ALDW's bottom line opportunity. I don't know how easily that will account for positivity versus negativity when it comes to predicting higher numbers for the company but I don't see a case for an earnings surprise in the asphalt area. We've known about Texas legislation affecting utilization of asphalt work for some time now, nearly a year, in fact. Maybe it takes several quarters to show up in the books but I rather doubt it. And ledger entries can take a lot of time to make it into the books well after laws are passed appropriating the funding. And even then not all parts of the process of highway revitalization will move in lockstep with other vital parts.
So paint me in the "show-me" corner. And, while we're at it, RINs have cancelled out glee in ample evidence dating back just a few months. The glow is off expectations of rapidly changing EPA rules and effectiveness and top-down Trump appointees responsible for selling the Administration on recommendations that would cancel some of the RINs induced pressures on refiners' bottom lines. Icahn has hit a huge snag with opposition party investigative campaigns. I think Trump needs to walk a narrow path for now or lose momentum across the board.
Still, today's rise is exciting as it tells me we're heading higher. Increasing volume and higher numbers often indicate a leg change. In this case it's likely we're heading higher, perhaps to the $12 level analysts are expecting.
I'm in that camp, of course. Yet I believe we are going to rise above $12 If we find we're going to receive 35 cents for the quarter to pay out next, $12 would represent a yield of about 11.5% That tells me units are going to rise above $13 and could make it to $15. If ALDW manages to avoid being swallowed alive by RINs, then $17-$18 becomes a strong possibility.
I'm ready.
