Energy Transfer Partners LP (ETP)

[harkmi]

New to board:
Found on Seeking Alpha

DAC: Enterprise Transfer Partners L.P. (NYSE:ETP) units currently represent an excellent buying opportunity for long-term high-yield income investors looking for capital gains as well as income. One of my favorite quotes from investing icon Sir John Templeton is:

"Invest at the point of maximum pessimism."

Templeton is known as a contrarian investor. He referred to his investment philosophy as "bargain hunting." His guiding principle was:

"Search for companies that offered low prices and an excellent long-term outlook."

I feel this statement perfectly illustrates where ETP units lie at present. The reward far outweighs the risk at the time. There is still a wide gap between the bullish sentiment level regarding ETP and the natural gas and energy sectors. The stock may have already bounced off the point of maximum pessimism, yet that only increases the margin of safety for investors opening a new position. ETP's newly combined assets have created a strong foothold in the most prolific producing basins for the MLP. This should augur well for organic growth for years to come. The over 12% yield, coupled with adequate coverage ratio of better than 1, establishes a solid margin of safety. The ETP is under-owned and oversold presently. I still see 30% upside in the stock. If we can break through resistance at the 200-day SMA, we could be off to the races. Discovered Dividends members are up 10% on the units in the past month alone with a 14% yield on cost locked in. The current yield is still a healthy 12.6%.