Northern Tier Energy LP (NTI)

[jugs]

Interesting, seeing NTI and ALDW giving back about a half dollar. As mentioned earlier this week, I unloaded 2,300 units of NTI over recent weeks. Prices received were in a range of $24.45 to $25.73 with about half at the lower end. My purpose was tied in largely with a wish to gather some dry powder while derisking; of course there was a nice profit to be taken as well.

Now I'm seeing units down about a half dollar. $24.52 is not the entry point I want.....I think there's time to print $24.00. Between the volatile crack spread moving to the weaker side as well as a likely diminished Q3 distribution due to the unscheduled maintenance now resolved---I'm prepared to sit on my 4,000 units while going more aggressively after ALDW. I've added to CVRR too, but I view Alon as the deal to feel. Lurking in the background of my brain is a cautionary note, not more than a yellow flag, perhaps---but a flag all the same:

Given that NTI's operating just a single refinery and there's already been a surprise shut-down sure to affect this quarter's payout, there is no way to predict a reliable distribution, should there be another "unscheduled" shut-down. Thus, another case for ALDW and CVRR.

There's time to watch developments but at under $25, ALDW is sure looking like a ripe plum. Comparing this with NTI on a day-to-day price basis only, ALDW wins hands down. The latter typically averages significantly higher. With the likelihood of ALDW's distribution being at or over a dollar, I view NTI as coming up a bit short this time around. Still, it's my largest position and will remain so for I strongly believe in it and its merits have yet to fail me.

I'd love to hear other perspectives here.