Background is in Investor Relations and portfolio management focused on energy stocks. Always looking for opportunities to learn & share more.
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Most others operate more than one refinery. This insulates although---even then---it guarantees nothing. Valero & CVRR---these are examples.
Jugs
Despite all the fine things one could say about the company, the fact remains that we investors are at the mercy of any incident bringing production to a close. Nobody gets paid when things grind to a halt.
Jugs
The stock market is hardly rational all the time. Sometimes I have to wonder if it is ever so! And that brings me to the conclusion that it is I who is irrational, daring to expect outcomes based on logic. Over the longer haul, we've come to expect proofs of various sorts. Yet how can we explain yesterday's massive devaluing of another refiner---CVRR (CVR Resources)? Often I watch NTI's gyrations and wonder what forces can so effectively move the unit pricing up or down nearly a dollar on absolutely no publicly available news?
Many will insist that the stock market is best described as a bunch of gamblers at play, foolishly hoping for the big win. Friends appear to be amazed when I score "the big one." They don't see me at work, poring over SEC filings, PR's & analytical rankings and exploring blogs in search of missed sparks. And it is this disconnect that has me convinced the market is NOT going to reward based on logic alone. Rather, it is for each investor to recalibrate constantly so as to manage ever-changing criteria.
Conspiracy is not a word in my vocabulary. At the same time, I'm increasingly thinking that there are many out there who think otherwise and it is they who observe a stock's price dropping a few cents and it brings them to bail. They fear that there is, indeed, a conspiring group of hedgies and institutional entities positioning themselves to wipe us little guys out for fun and profit.
A seemingly mindless flight for the exits provides some of us with fabulous opportunities as was the case a month ago when NTI could be had for $18. I added. So all is not necessarily lost or wasted on us of logical mind. lol
I'm a committed NTI fan. I strongly believe we will do extremely well with this one. I'm almost 6% underwater but expecting parity within a month or so. To me, this is a logical outcome. Will there be setbacks along the way? Of course! Is it logical to expect things to turn out favorably? It is, but only when we introduce personal opinions to the mix. And opinions can become dangerous when we allow them to completely take over. I've done this with NTI---putting 3/4 of my investible money on the line.
So call me a sucker for trusting my instincts. Or, to put it another way:
I am the captain of my own ship. It may go to hell in a hand-basket but I'm willing to pay for my errors. And chief among them may be items addressed in your last line:
"Just need no unexpected down time and less noise out of DC over Q4. "
You've now heard the gospel according to Jugs---I'd appreciate opinions from others---there's a number of sharp and intuitive significant others on this board with much to say.
Jugs
That sounds like wishful thinking to me. You can't possibly know what lies ahead. None of us knows. It is dangerous to make predictions as they will often mislead readers lacking the experience others have. This is why astute message board contributors close with comments such as: "In my opinion, only."
In my opinion only!
Jugs
I agree with everything you've said.
The 11.5 million unit sale is priced at $22.85. I don't believe we'll be drifting lower than that any time soon. And---it may prove to be an effective bottom upon going ex-dividend. Today units were all over the place with the indices dropping indecently. I think our close is tied in with the current offering priced at $22.85. I got a couple of hundred at $22.34, looking at these new ones as costing $21.66 with distribution to be added. Sadly, that is well below my overall cost basis. NTI happens to be my largest position by far and I've got an enormous paper-deficit. I'm more than modestly hopeful!
Market manipulation is obvious when I see units trading way up, way down and reconciling right to the penny upon closing. I guess I'm part of the problem if volatility is, indeed, a problem---after all, I'm contributing to market gyrations by buying. And I'll be part of the other side of the equation when I begin to thin my positions.
Good discussion although there is still some confusion as I read other posts on the subject.
Jugs
The broker will tell you that ownership prior to the day of ex-D will guarantee you get the payout. Settlement date, date of record---these have nothing to do with your distribution entitlement although they may explain bookkeeping measures in play for the transfer agent and brokerages. If it goes ex on Tuesday and you buy on Monday preceding, you get the divvy whether you buy into settlement dates or not. Ditto when it comes to date of record. These other items are reconciled eventually but don't determine anything except for after the fact.
Often I get DRIP inflows two weeks after ex-day for this reason. But the entitlement is escrowed no matter what and I always receive my due.
Jugs
Sorry to do this to you, Pete, as I have only the highest respect for your contributions here. However---
Just verified it at Ameritrade and---
The settlement date recognizes ownership but has nothing directly to do with the dividend entitlement. It is a matter of bookkeeping involving the transfer of assets between the brokerage and the transfer agent.
When we buy an income producer, we do it in either of two ways---with or w/o its pending distribution. Buy the stock by the eve of the planned distribution and you pay for the stock WITH its dividend included in the purchase price.
When it goes ex, it has been stripped (by SEC mandate) by the brokerage in the amount of the distribution now set aside for purposes of distributing. Of course gaps to the upside or down due to other circumstances will increase or offset accordingly.
Thus, the stock is going ex-dividend on the 20th. Buy it on Monday the 19th and you'll get the distribution.
I hope you'll check this out for yourself as this is a bone of contention for many, many retail investors and this discussion is good for us all.
Jugs
The settlement date has no bearing on receipt of dividends. But the stock before the distribution is extracted and you get the payoff. Forget about settlement date, record date---they apply only to the transfer agent. We retailers simply need own our positions by the close of ex-div. day eve.
Jugs
I believe units dropped around $1.11 settling at $22.70, give or take a penny or so. As others have stated, this is part of a relinquishment and has no meaningful bearing on the company itself. I added a lot of units in after-hours trading, more than I should have as I've exceeded my budgeted amount, Worse, if units drop below my $22.73 threshold, I'll have to pick up some more in the morning.
I can defend it in part because of the distribution to be received, bringing these units down to a purchase price of barely above $22. In my opinion this is an incredible steal. In fact, if we annualize the Q2 divvy we get $2.72---and this is most likely the worst showing we could possibly get in the next several quarters. Dividing this amount by $22 tells us the actual cash dividend comes to 12.3% making the yield closer to 13%.
That is one fine return on this investment.
Jugs
Rents is probably the wrong word, possibly the result of speech-to-text transcription without adequate proofing. Obviously "RINS" is the correct term here---reverencing credits.
Jugs
From the news of today, surely of interest to us all:
RIDGEFIELD, Conn., July 9, 2013 /PRNewswire/ -- Northern Tier Energy will report its financial results and announce distributions to common unit holders for the second quarter of 2013 on August 12, 2013, subsequent to the closing of the market at the NYSE. Northern Tier Energy will also host a conference call to discuss its second quarter 2013 results on Tuesday, August 13, 2013 at 11:00 am Eastern Time. Callers may listen to the live presentation, which will be followed by a question and answer segment, by dialing 877-280-4957 or 857-244-7314 and the passcode 61031520. An audio webcast of the call will be available at www.ntenergy.com within the Investor portion of the site under the Calendar of Events section. This audio webcast will be available on the website for fourteen days after the conference call. A replay will also be available by teleconference for seven days from the conference call. The replay teleconference will be available by dialing 888-286-8010 or 617-801-6888 and the passcode 61070303.
Jugs
We know one of three months of refining was lost during Q2 due to enhancements in April. Storage utilization will likely help answer the question although I believe I read that the Company maintained the contracted supply side.
Jugs
What tells you shares will rise to $16? I think that's plain crazy for if it were at all true, everybody would be jumping on the wagon for a tripling of the share valuation. I love hype and excitement but not fabrications that might really hurt the unsuspecting investor.
Jugs
Based on historical evidence I think it's a safe bet that we'll get an announcement on or about August 14th regarding the next distribution.
Jugs
You're in love with your number of shares and not their inherent value.
I held 160,000 shares until recently, a victim of the same silliness. I sold off all but 17,000 shares, accumulating a tax loss carry forward of $169,000. In effect, our tax system will not tax me on my next $169,000 of gains. This is entirely legal.
I figure I have plenty of time to restore at least part of my earlier position, When the reverse split is implemented, I expect shares to drop, at which time I'll be ready to accumulate once again.
Shares are currently cheap because they hold very little value. I expect this to change come December, when I think shares will approach $3.50 to $4 in anticipation of the Q 1 drill plan from Tullow. Holding shares now with built in losses redeemable by realistic tax management is insane, in my mind. Better to accept that your shares have given up far too much value to butter even a small piece of bread. Life is good when we don't lie to ourselves, clinging to busted dreams no longer more than mere shadows of their former selves.
Jugs
Too bad there's not any activity on this board. I think the greatest deterrent lies in the newness of the MLP structure; also, perhaps, confusion as to why these entities are emerging at this time. And then there's the fact that people are not likely to trust the first several quarters of numbers, given that the first quarter tends to offer terrible losses whereas successive quarters often reflect vastly improving stats.
I am liking ALDW for a number of reasons, not the least of which is its potential for casting off huge quarterly distributions. I'm not miffed that there was a month of down time in Quarter 2---this is hardly unusual for a refiner. I have just under 400 units at present but am accumulating as cash becomes available. I view this as a logical alternative to NTI where I have a sizable position. I need to diversify as my allocation is truly lopsided.
I hope to see more participation here!
Jugs
Today's trades have me wondering what happened to derail things. We go ex-dividend in the morning and have to open down 17 cents. I can't understand why units dropped about 15 cents today. Moreover, the distribution represents only a half quarter. Anybody have a plausible explanation?
TIA.
Jugs
Maybe I can get some help on this:
The emergence of gas & oil MLPS is exciting as could be for several close friends and me. My hunch is that it's in response to governmental tax legislation with o & g corporations opting out of traditional tax-based vulnerability. Given that the government is unlikely to further stifle corporate business at this time, it appears to me that high yields typical of refiners are the place to be for someone desirous of fairly reliable quarterly income. Not to imply the amount of income is fixed in stone, for it's not. But I've got so many units of NTI that even a 60 cent distribution will give me $6,600. Annualized we're talking about a 9% return, the yield higher still, plus I'm expecting units will be at or above $30 by November. This points to hellacious profit potential, imo.
Big question: Do you think the shift to limited partnerships has come about as a means to develop a broader unit-holder base, thus placing units into stronger hands while guaranteeing more favorable tax options?
Also--I've just begun positions in CVRR and ALDW. Each IPO'd over very recent months. And each is showing signs of majorly enjoyable quarterly distributions. In fact, I'm seeing strong parallels to NTI with respect to convenience stores, asphalt, the refining side and pipeline interests. My sense is that each of these companies will grow quickly in terms of market cap and greatly outperform many other sectors for the next two or three years. And I love that we're talking about home-grown all-American interests not dependent upon flagging or failing European uncertainties.
Your comments and opinions on the above will be greatly appreciated.
Jugs
Thank you for a great response!
The retail outlets are the quintessential captive audience for they are contractually obligated to buy their oil-based products from parent NTI. This brings other income streams into our stores. A great mix!
I think there's a lot of confusion when it comes to discussions over quarterly distribution. Seeking Alpha has been flitting between 60 cents for Q2 and the other day---$1.00. I think there's a lot of goofy talk, frankly, for nobody knows the extent of preemptively ramped up storage sufficient to carry the supply side through the 25 day shutdown in April. I'm expecting much the same thing to occur as a result of the maintenance shut-down come October. There's a slight irony in that the company acknowledges that there was no slacking off in meeting the needs of our preset wholesale buyers. I could be wrong but I'm thinking this means that storage was sufficient to cover the down time. Whether there was sufficient opportunity to take advantage of spot market deals in league with JPM Commodities in a shorter time span---I certainly don't know. But it's possible that this quarter will treat us well enough.
If nothing else, we've just had opportunity to accumulate at prices all the way down to $23.50. This past week has been phenomenally productive for me. I'm expecting we'll soon print $28. Probably the thing most frightening to investors is the lack of operating history as a Limited Partnership. But this, too, shall pass.
Jugs
Allow me to disagree when you say NTI is hardly a refiner at all. The fact is that those retail outlets sell the gas and other downstream products that spell company profitability. Backing out the downstream product lines and everything else amounts to just 24% of the bottom line.
Without the refining operation, there isn't enough business to keep our company going as a profitable entity. Then too, there's the franchising portion of business but we dare not forget that motorists flock to them to buy gasoline and food while traveling.
Jugs
There should not be much of a correlation to price/unit changes due to the passing of the payout for the past quarter. There's certainly no basis for concern regarding the $1.23 distribution. And there's the better part of the quarter yet to indicate expectations as to the next quarter's payout,
There will always be catalysts for change and it falls upon us to determine what those catalysts might be. Obviously, changes either up or down impacting the crack spread would represent such a potential for momentum change. Throughput is yet another item to be reckoned. And then there's the possibility of disasters precluding weakening production numbers that might portend difficulties lying just ahead. These are but a few such concerns.
I'm not seeing reasons for the unit price to drop immediately following the 5/30 distribution. In fact, I could believe investors may be stalking units as we speak, in order to get situated for future quarterly distributions. This is what many of us here are doing for we doubt these prices will hold up for long. As for units rising following the payout? The only catalyst I can believe is the wish to be on the receiving end on the next payday. And I see enormous potential for an encouraging capital appreciation development. All told, I cannot imagine a better place to be in as this is everything an investor wants.
Len
Yesterday had me paying a tad more than $25/unit. Today I added several times at $24.75 and points below.
The information you've provided doesn't refer to open market acquisitions, I believe. Rather, it's a compilation of options awarded Directors et al as part compensation for their services rendered.
I wish their new units represented their faith and confidence in our company but that's not necessarily the case. It's reflective of their paychecks and not more. However, that's hardly a bad thing, just not deserving of attention.
Jugs
I may not be right. Yes, it happened to me a few years ago and they took my divvy away just like that. But I know more today and I'd make a stink to the brokerage. After all, it's their responsibility to honor transactions made with their clientele. I'm not saying they will yield but I'd sure be holding out for a hundred commission-free trades or something of the sort. Meanwhile, let's hope you don't find yourself in an uncomfortable situation.
Good luck!
Jugs.
Are you disappointed that you were unable to anticipate the future in store for HDY?
Or is it that you need to blame others for an investment gone astray?
None of us long term players have fared better than you yet there are ways to maximize opportunities despite all the disappointments. I sold off about 75% of my position several months ago. This created a significant tax loss carry-forward to be used at a future time. The net effect was to invite IRS to compensate me for my losses. Today I added two thousand shares at under 52 cents, brining my cost basis lower. I expect to be able to continue adding until late November with prices in the 47-51 cent range,
There are probably other ways investors are making lemonade out of HDY lemons.
Jugs.
This situation happened in like fashion to me. Things caught up and my gain was confiscated.
Moral of the story: Don't spend the cash yet.
Jugs
All companies suffer from the dirty laundry syndrome. And they manage to survive---not because of the laundry but because of their resilience. Business success is all about operational smarts that produce positive cash flow. If we look for negatives, we'll invariably find them. But why not focus on opportunity to succeed? Let your stock picks reflect your courage to stand firm with things you can reach out and touch because you understand how the program works. If you know what this company is all about, if you've explored and studied their roots prior to opting to form the MLP as we know it to be today---and if you have the guts to commit to your own personal deductions---then the process becomes far easier.
This is far and away my largest security. I believe I know the circumstances surrounding likely gains and possible write-downs, too. On sum, I see much to be gained through stock participation. I see no point in belaboring whether to buy in or hold out.
As for waiting---if you subtract the end of month payout from today's closing price per unit---the cost seems to be extremely reasonable to me. At the same time, I believe strongly that units will fetch a far higher price soon enough, assuming the investment community comes to recognize units are deeply under-priced. Add it up and move in step with your comfort zone.
Jugs
NTI's ownership role in the pipeline is 17%.
Jugs
They won't be establishing a dividend payout schedule for a year out. Theirs is a variable payout rate based on net revenues after accounting for numerous factors aimed at minimizing disruptive issues. It is possible the next quarterly payout following the one later this month could be higher than the current $1.23 or it could even drop to 45 cents. And there will have to be an accounting for the month of downtime (last month's scheduled shut-down). Still, if we average the sum of three payouts thus far, nobody could argue against the record, imo.
Jugs
My hunch is that investors pretty much know you don't get a 19% yield with a pick barely a few quarters old when most of its peers aren't able to sport even an 8%-9% yield. Back-of-the-napkin math tells me this stock should double within a year or so, given that it is committed to handing out a minimum of 90% of the net and appears likely to sustain the current payout rate.
This imbalance with respect to typical MLP payout history originally led me to start a position in NTI. I sold a lot of other picks to firm up a sizable position. Reading about the earnings estimate of just 14 cents this morning as opposed to the previous 45 cents? That had me nervous. Fortunately I can now await the $7,500 infusion due in a couple of weeks.
Life is sweet at times.
Jugs
5
Excellent comments---very much appreciated and I thank you for bringing things to the fore and connecting dots.
Jugs
Are you thinking there won't be any impact arising from a month-long shutdown in the refining division? I wonder of the company maintains enough storage to maintain routine volumetric levels?
I'm taking advantage of the sizable drop in unit price this week but I know better than to expect another $1.27 quarterly distribution anytime soon. I hope I'm wrong.
Jugs
Excellent interpretation! I'm sure others appreciate your input.
Jugs
The filing indicates an action initiated by a corporate partner holding in excess of 60 million units and should not be confused with more usual public offerings. If there is a swoon on Monday it will be due to general market conditions and not specific to the filing.
Methinks you may not understand that these "Q" shares willl most likely disappear when the merged entity comes out of bankruptcy. This is how it works with Chapter 11, witness GM of a few years ago when ALL common shares were erased from the books.
I've been playing this for a couple of months and have done nicely but---I'm not expecting to make my life's fortune on this extremely dangerous play. AAMRQ is not an investment vehicle. Rather, it's an opportunity to grab a few bucks from those who don't see the dangers of a BK stock and for some reason are apt to ignore the fast and furious results following the judge's ruling.
Jugs
Delisting has to be the major force pressing down on this stock price. Nobody considers investing in a stock most likely to suffer a huge loss of value as would be the case when a delisting notice is posted. Whether your cost basis is $1.35 as is mine, or about 58 cents for a relative newcomer---noone wants to experience a harsh haircut.
Tullow is tops in the field, NSAI---ditto. And we have some highly regarded folks comprising our Board and executive roles. Top it off with global oil and gas demand and circumstances surrounding the concession plus growing recognition in African oil interests and you have a terrific recipe for energy investors. So many positives with just one negative---but what a down-draft force it is!
This too shall pass and I'm in agreement with those believing Tullow will help bail this body of beleaguered share holders out when they take a more prominent role. I can't wait!
Jugs