NGL Energy Partners LP (NGL)

[fretgenie]

Jugs, I do agree that in the unique case of NGL there are a variety of very legitimate justifications for a buy back, despite needing to finance the shares with debt. The main one being the market has randomly priced their shares far below intrinsic value.

Since they will add debt to fund these repurchased shares, and not free cash flow, my preference would be that they keep these shares in the treasury. They don't have to pay dividends on them, but it gives them greater financial flexibility down the road since treasury shares can always be sold to raise cash if needed. Let's assume the shares are 40% undervalued, then the sale of the shares provides free funding without marginal debt less the 60% borrowed on the front end.

Anything NGL can do to continue to clean up their steadily improving balance sheet I support 100%.

The main justification I see for a buy back, is that this is a wise investment, given the temporary fire sale price.

That will be 2 cents, please ;)