NGL Energy Partners LP (NGL)

[jugs]

You raise an interesting point re. financial engineering. Ordinarily I'd be in agreement with you. This moment in NGL, though, is not an ordinary situation as made obvious by our jointly believing units are drastically undervalued at present.

That said, I'm not sure the proposed buyback would/should be regarded as an example of engineering. Rather, my sense is that management is gearing up to their anticipated profitability down the not-too-distant road. If guidance proffered at the last CC should be realized, it would be irresponsible to hand over to unitholders a still greater share of DCF adding to the ridiculously high yield we now find. At the same time, the company must hand out most of the quarterly profits due to retained earnings constraints.


By reducing the number of units available for trading, the company stands to gain room in which to operate.....i.e. a tighter float and depending upon how the buyback is arranged---- units now in the public domain may be bought back and either officially retired or simply kept in the company treasury.


Your further thoughts are most welcome as I'm glad you brought this up.