You hold NGL and express gratitude for not being the sole believer here. That's important as it reflects a capacity to grow. But when you bring up CVRR in the same breath, I can't help thinking that you may not fully grasp what happened with NGL yesterday; that CVRR doesn't belong within smelling distance of your portfolio.
The key points are:
1. NGL announced the sale of an asset plus possible follow-on asset sales down the road---in the form of trust units.
2. This move guarantees NGL can continue its pursuit of previously stated goals without having to go begging for capital market assistance. This is similar to self-financing. A few of these goals demonstrated:
a. continuation of the Board's stated aim of continuing distributions.
b. less burdensome credit rating offsetting Fitch's negative one this week.
c. ability to continue the Grand Mesa plan without hat in hand help.
d. a willingness to divest itself of certain assets not central to core operations.
e. determination to establish overriding respect for the unit-holder.
f. readiness to execute successfully and profitably even in this worst of all energy-related environments.
Adding things up, what we have is a remarkable turn-around company yet the underlying rhythm stems from two primary drivers:
1. NGL will NOT be beaten down in this or any other environment!
2. NGL is reclaiming its earlier price point EVEN IN THIS WORST OF TIMES!!
Those who happen to be new to this company will see these two points just above and pile on. Of course they'll be thinking about that juicy 64 cents/unit around the corner and they know it is the first of many just ahead. And 64 cents for a cheap stock is terrific, no? Even at current valuation it's a 20% yield!
There's more I could add but I think that's enough. So let's move on to CVRR.
CVRR is controlled by Icahn. That's not necessarily bad although I personally do not trust him to put unitholder interest before his own.
CVRR is admittedly facing a severely damaging blow to throughput due to the usual safety program commenced every six years in the refinery biz. That future is now.
Analysts are calling for crack spread devastation to be reflected by distribution cuts in the MLPs---about a third if not more. So if we're thinking NTI may drop back to between 70-80 cents, then I could believe CVRR will pay 55-65 cents. And that may be overstating things.
NGL may present yet another buying opportunity prior to the final push towards the next quarterly payout. After all, who doesn't want an annualized 20%? I lean towards $16-$17 in the final days before the day of record slams shut on the quarter. That means we might see another 25% gain in appreciation by then. Monday will probably find value investors moving in but as lust subsides I could see prices dropping back. People forget quickly and that can work to our advantage. I'll be a buyer at under $12, myself.
CVRR is a fine company, great business model and executes well. And with the pending implosion of NTI, the company stands to be at least a partial offset in the refining MLP arena.
But my questions are these:
Can CVRR offer the same level of upside we see in NGL or ALDW?
When oil begins to return to an upside bias, how will that shine favorably on CVRR unitholders?
And then compare the above with how a market reversal in energy might impact on NGL. And also ALDW, by the way.
Caveat: I'm all for ownership in CVRR. Just not now! I think it's a bad call.
Lastly, I've watched your actions for some time now and I know you will understand everything I've said herein. I'm hoping you won't be offended by my treatise. lol What I want is to urge you to reorganize your thoughts as you examine key issues critical to stock management.
ALDW is moving beautifully, surely you see it as well. And NGL will probably show some serious reclamation moves over the next month. NTI may or may not hold onto support but one thing I'm absolutely certain of is that I have no wish or need to be part of the legal garbage now ensuing. I'm in the market for fun and profit. Court battles are not for fun or profit unless you're a dreamer or an attorney. And this is the wrong time for piling onto CVRR.
Finally, for the sake of diversification and allocation in one fell swoop---take a look at LADR. It's not a short term swing trade candidate. It is a high yielding REIT with conspicuously highest tiered renters on long term contracts. I began two positions yesterday...200 units per trade. I'm hoping to study this one over the weekend. Meanwhile, go to the LADR board here at IHUB for a preliminary grounding.
I hope you find this helpful.
Len
Recent NGL News
- NGL Energy Partners LP Announces First Quarter Fiscal 2025 Financial Results • Business Wire • 08/08/2024 08:35:00 PM
- NGL Energy Partners LP Announces Availability of Its 2023 Schedule K-3s • Business Wire • 08/01/2024 10:30:00 AM
- NGL Energy Partners Announces Earnings Call • Business Wire • 07/26/2024 10:30:00 AM
- NGL Energy Partners LP Announces Quarterly Cash Distribution for the Class B, Class C, and Class D Preferred Units • Business Wire • 06/21/2024 10:25:00 AM
- DocuSign Stocks Drop 8.5%, Braze Surges 15% as 1Q Results Beat Expectations, and More in Earning • IH Market News • 06/07/2024 12:09:36 PM
- NGL Energy Partners LP Announces Fourth Quarter and Full Year Fiscal 2024 Financial Results; Guidance for Fiscal 2025 • Business Wire • 06/06/2024 08:33:00 PM
- NGL Energy Partners LP Announces $50 Million LP Common Unit Repurchase Program • Business Wire • 06/06/2024 08:20:00 PM
- US Index Futures Mixed; Oil Prices Rise • IH Market News • 06/06/2024 11:29:43 AM
- NGL Energy Partners Announces Earnings Call • Business Wire • 05/16/2024 08:33:00 PM
- NGL Energy Partners LP Announces the Payment of All Outstanding Distribution Arrearages for Class B, Class C and Class D Preferred Units as of Payment Date April 25, 2024 • Business Wire • 04/09/2024 09:15:00 PM
- NGL Energy Partners LP Announces Sale of the New Mexico Ranches • Business Wire • 04/05/2024 04:46:00 PM
- NGL Energy Partners LP Announces Cash Distribution of 55.4% of Outstanding Arrearages for Class B, Class C and Class D Preferred Units • Business Wire • 04/04/2024 10:26:00 PM
- NGL Energy Partners LP Announces Status of Investor Tax Packages • Business Wire • 03/04/2024 09:45:00 PM
- NGL Energy Partners LP Announces Third Quarter Fiscal 2024 Financial Results • Business Wire • 02/08/2024 09:33:00 PM
- NGL Energy Partners LP Announces Cash Distribution of 50% of Outstanding Arrearages for Class B, Class C and Class D Preferred Units • Business Wire • 02/06/2024 10:33:00 PM
- NGL Closes $2.9 Billion Debt Refinancing Transactions and Amends and Extends Asset-Based Revolving Credit Facility • Business Wire • 02/02/2024 05:55:00 PM
- NGL Energy Partners Announces Earnings Call • Business Wire • 01/30/2024 09:45:00 PM
- NGL Energy Partners LP Announces Pricing of $2.2 Billion Offering of Senior Secured Notes • Business Wire • 01/25/2024 09:58:00 PM
- NGL Energy Partners LP Announces $2.1 Billion Offering of Senior Secured Notes • Business Wire • 01/23/2024 09:35:00 PM
- NGL Energy Partners LP Announces LEX II Large Diameter Pipeline Supported by New MVC and Extension of Acreage Dedication • Business Wire • 01/22/2024 11:30:00 AM
- NGL Energy Partners LP Announces $700 Million Senior Secured Term Loan Facility and Provides Financial Update • Business Wire • 01/17/2024 10:48:00 PM
- NGL Energy Partners LP Announces 2023 Open Season for Grand Mesa Pipeline Starting December 6, 2023 • Business Wire • 12/06/2023 11:30:00 AM
- NGL Energy Partners LP Announces Second Quarter Fiscal 2024 Financial Results • Business Wire • 11/09/2023 09:23:00 PM
- NGL Energy Partners Announces Earnings Call • Business Wire • 10/20/2023 10:30:00 AM
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