We appear to be approaching the $11 price point. It may take a few days but barring geopolitical ruptures, I think we'll get there.
It's important that we recognize the nature of this rise in valuation. On the surface for many, the instigator is going to be CEO Krimbill's purchase of units costing about two thirds of a milly. Some will say this is a vote of confidence and I share that opinion.
Others may point to the board's authorization of the planned repurchase of $15,000,000 worth of units on the open market.
Both are certainly valid points to be weighed.
I see something more meaningful to me, personally:
The valuation of a Fortune 500 company has seen its valuation eviscerated to the tune of a 2/3 drop from January of this year! Sure, we are slowly returning to that point but it is, after all is said and done, reclaiming lost turf.
It begs the question: Was the precipitous drop justified?
Please don't point to a single quarter's disappointment--- that is not enough to do the monetary damage done this year. A single disappointment hardly establishes grounds to erect gravestones.
But seeing how stupid the investing community was in shouting the most serious epithets, I lunged at opportunities to avail myself of ridiculously low prices as I grew my stake from 15,000 units of NGL to the present 21,000 units. My cost basis is $12.06 so I'm still under by $30,200. The "however" is far more meaningful, though---
When the next page of distribution guidance comes out, units will likely reach for $13 if not greater. If so, then I stand to gain at least half of my paper loss back in the form of distributed income to me. Also, a rise in valuation to $13 will have me newly positioned so as to be free of the paper loss altogether.
This isn't rocket science, folks. We look for solid companies capable of breathing on their own without begging favors from the government or selling units with dilutive abandon.
And we've got one in NGL.
Happy hunting!
