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Palantir

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Posts posted by Palantir

  1. Have members ruled out that BV might decline? I mean BRK is so leveraged and heavily into cyclical, industrial stocks which are getting pounded this year. Eg, NSC is down -30% YTD, and if we assume a similar valuation decline for BNSF, and multiply by 2x for leverage, the "true" BV might be lower than anticipated?

  2.  

     

    Today, I'm watching people pour out of oil, and it has done nothing except to get me titillated and excited.  If you think oil will be permanently at $40 or less per barrel, you are out of your mind.  Cheers!

     

    Oil may not be forever at $40, but some of these companies might not be alive to see oil > $40. Not to mention the companies whose valuations implied >$90 oil for the foreseeable future now have impaired profitability and growth prospects.

     

    Just because valuations are low now doesn't mean they are good investments! Just watch and wait as their hedges roll off...

  3. good luck, in fact I expect a year from now the yield to continue to rise until Kelcy decides to consolidate. There are too many headwinds against this sector - lower oil prices, lower demand, higher interest rates, higher cost of capital, lower upside due to IDRs....time to invest in these things was 10 years ago, but typically after the growth has already happened the value investors are interested.

  4. What upside? They are barely covering their distribution right now and may get high single digits growth. Do you think they want to finance projects with equity yielding 9%? Now maybe they will because ETP is in the high splits and ETE benefits disproportionately from unit issuance. If you want upside why not do ETE?

  5. SunEdison (SUNE) is getting slaughtered today and if you only look at it superficially that might make sense. Digging a little deeper reveals a lot of value here though so I've been buying it today all the way down.

     

    Feel free to add to the SUNE thread.

  6. If volumes don't materialize then that means that growth projections will be lowered, which raises the cost of capital. If that happens, the partnership ends up in a vicious cycle, where it becomes very expensive to raise additional equity for projects. You realize ETP has a 9% current yield? Also, EPD does not compete with crude by rail.

     

    In the midstream world, proposed projects are not constructed without firm commitments.  Those firm commitments, in almost every case, take the form of take-or-pay contracts that last 15-20 years.  So the comments that volumes may not materialize is quite irrelevant.  And yes, I realize that ETP's yield is almot 9%...I specifically stated that in my earlier post.

     

    And if those firm commitments do not materialize?

  7. If volumes don't materialize then that means that growth projections will be lowered, which raises the cost of capital. If that happens, the partnership ends up in a vicious cycle, where it becomes very expensive to raise additional equity for projects. You realize ETP has a 9% current yield? Also, EPD does not compete with crude by rail.

  8. I have sharpened my risk management limits, because a temporary evaporation of liquidity surrounding a potential rate hike could make cheap and vulnerable stocks even more vulnerable.

     

    Agreed, I think investors vastly underestimate how pervasive the combination of low oil and an interest rate hike is going to be...SUNE is exposed badly to this unfortunately as well. :(

  9. Buying EPD and ETP.  Both have sold off quite a bit...I am happy to nibble on some EPD @ a 5.8% yield and ETP @ a 8.8% yield.  People seem to think that the weakness in oil and gas producers mean that the midstream companies are f*cked also.  What most forget is that commodities operate in a cycle...low commodity prices tend to drive higher demand.  In the case of ETP and EPD, both have substantial access to demand drivers such as our country's premier petrochemical complex and Mexico's increasing appetite for low-cost natural gas. 

     

     

    How do you know EPD and ETP aren't hurt by weakness in O&G? Oil is being hit by supply, but it's also being hit by demand, what does that tell you about volumes?

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