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Strategies & Market Trends : Value Investing

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To: E_K_S who wrote (38674)	8/2/2010 11:42:35 PM
From: Spekulatius	of 78911

re MLP's You should really look here: investorvillage.com Most investors in MLP's look at distributable cash (cash flow - maintenance expenses/Capex) as a metric instead of earnings yield. Most MLP's will distribute the majority of their distributable cash (90%+) but some will keep some especially in good years. Maintenance expenses are a somewhat iffy number and one should keep in mind that some assets have a finite life (NG gathering systems for example) while pipelines can last for decades. I also recommend to look at EV/EBITDA since you can compare taxable cooperations with MLP's using this metric. You will find that most MLP trades at substantial premiums to taxable equivalents right now. During the crisis some MLP traded at no premium at all and sometimes even at a discount. MLP's tend to be very sensitive to the condition of the credit markets.

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