Following is a post I placed earlier on the NGL board. Pete807 asked if I'd meant to do that and of course, it was an error on my part. So, then, here is the analysis:
ALDW is a virtual "can't miss" in terms of forthcoming payouts for the rest of this year. If they're able to pay out 38 cents now as we come out of the worst quarter of the year, then it is more than logical that the current quarter will pay at a minimum---60 cents. When that 60 cents is in hand, I believe we'll be seeing quarter #3 paying in excess of a dollar as it is the most profitable quarter of the refiner's year. Quarter #4? Probably in the 85 cent to 90 cent range.
But to keep things down to earth, I'm looking at a steady 60 cents/average per quarter. That is very possibly no more than about half of the real returns we'll receive.
Now, then...60 cents times four (the number of quarters that add up to an annualized number) comes to $2.40 payout per unit of ALDW. Divide this by the current price of a single unit which is $11.63 and the approximate yield for us investors is a staggering 21%.
This will not hold up because everybody aware of the situation will be climbing on board. This, in turn, will drive the unit valuation of ALDW far higher. The more people reach for ALDW units, the higher the cost will go. Where will it end? I believe things will sort out with ALDW units coming to rest when the payout yield is at or beneath 8%. This works out to a unit having to rise to $30 if only to be in synch with your usual MLP distribution basis.
The above explains the dramatic rise we're seeing over the past six days. The opportunity is at hand and the smarter stock pickers among us will be looking ahead by establishing their positions now before the really big climb begins. As I've been saying for the better part of a year now, early Fall of this year---around September sometime---ALDW will be shooting for higher numbers.
I may be wrong so make your own critical thinking the primary key guiding you towards financial independence. But please don't discount opinions shared on this board as they may bring you unexpected wealth. We all hope so, I'm absolutely positive!
And a big thanks to Pete807 for his vigilance.
