Good question but I can't answer it.....
Last week I added significantly to NGL---500 units. Added three hundred ALDW also.
I could not be more confident in these two and have allocated more than half of my stock-investible cash in them. Other cash is in land that is highly prospective but stocks are my first choice. Am holding twelve stocks in all. That should give you some idea as to where I stand.
Now, then--- my only unrest in NGL lies in the fact that the company has not shown any inclination to explain publicly how it is that management and the BOD displayed a surprising divergence in terms of appropriate levels of distribution. CEO Mike Krimball fairly assured the audience that there'd be a steadily escalating rise in yield beginning with Q1 but it then turned out that the BOD decided otherwise. Now, I will say that this is a good sign for me in that it makes very clear that management is not in control of the Board. They are supposed to move independently of one another in order to preserve corporate integrity.
However, many in the public sector won't know it works this way and are angry and/or disillusioned due to disappointment.
The reason I'm not similarly affected stems from the fact that part of my career was spent directing Investor Relations for traded companies and I'd never have been caught in an embarrassment such as appears the case with NGL.
However---the company has performed very nicely in my opinion so while the IR side might have been more smartly managed, the company itself is doing very well. For this reason in part, I saw fit to add last week. Also driving me to add was the opportunity to grab units at beneath $13, that was irresistible.
Now, ALDW is also a high yielder. I expect we'll receive something in the range of 60 cents or higher for the current quarter. If I'm correct, then the yield will be so high that investors will likely pile on savagely. I'd welcome that, of course. lol
We just got a 38 cent distribution from ALDW and annualized it'd be in the 14% range. That's so high, investors will lust to get on board when guidance comes out around mid-July but, of course, that's only if I'm right about sustained excellence. Remember---the 38 cent payout came as a result of the year's weakest quarter for a smaller refiner. Also, with oil beneath $50, people are taking advantage of cheap gasoline and putting on the miles in more pronounced fashion than in recent history.
So, where are we, then? Obviously I believe very strongly in both of these but the bottom line is that I'm open to adding to either as daily pricing dictates. I see pretty much equal opportunity in the two picks. Therefore let me suggest you consider placing your investible cash into both positions. That's pretty much what I'm doing.
I would caution against jumping head first into ALDW as it's being played hard as we speak. NGL was played during the past few weeks but I suspect it's largely played out now, leaving it available to resume more normal trading. It has been the subject of gross manipulation in my opinion.
ALDW "should" be expected to drop to somewhere around the $10 area over the next several weeks or so, prior to guidance from management. This is slack time and represents opportunity to take advantage of momentary dips. I'll be a buyer below $10.50 should it occur.
So there you have it. If there's a moral to this story, then it comes down to splitting available cash between the two picks. Both are doing well in their respective slots and as we move forward, seasonal cyclicality should work to advantage. Once you've secured positions, you'll be better able to tweak your holdings accordingly and thus take advantage of market fluctuations.
I hope this helps you. And should you decide to come on board, let me wish you a safe and prosperous journey.
Jugs
