Question for the day:
Does ALDW deserve our investment based on the current 12% distribution annualized?
Follow-on question:
Do we agree that ALDW units must rise to offset the obvious imbalance given that MLPs don't pay 12%. More likely, it's going to be somewhere in the 5.7% to about 7% range.
$22 is the reasonable valuation for this minimum $1.40/year distribution basis as it points to a 6.5% yield. We're a long ways from there, right?
While it's too early to be thinking in terms of executing a plan to sell part of my holdings here, I can say that my ears won't begin t perk up until I find we're printing above $20. And if we arrive at that valuation forcefully, sensitivity to momentum surges dictate that we scale eventual profit-taking to making good sense.
In English, let me say that the best laid plans may get you laid but that might not be the best plan for all. Better to remain nimble and quick even if your name isn't Jack. Screw the candlestick!
Today we see traders driving the cost per unit down on light trading volume. Some of them are probably short term traders cashing out now while the getting is good. Others may be chiming in, knowing we go ex-distribution early next week and they figure on scaring us longs into dumping now rather than taste our own blood when the 35 cent distribution is yanked out.
If our units drop back to the $10.50 range at any time in the coming couple of months, I'll be adding units. However, look at NGL which has been hammered and what is it doing? We have a sour market today with all three major indices down meaningfully and NGL is flat-lining at $10.70---exactly where it closed yesterday.
Games are being played for sure. We don't have to play with them.
