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Strategies & Market Trends : Value Investing

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From: E_K_S	10/17/2013 4:30:35 PM
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Digital Realty Trust Inc. (NYSE: DLR) - closed out position will revisit in 31 days El Paso Pipeline Partners, L.P. (NYSE: EPB) - Doubeled up position @ $40.67/share QTS Realty Trust, Inc. (NYSE: QTS) - Looking to move DLR proceeds into this new cloud IPO below $21.00/shre Marlin Midstream Partners, LP (NasdaqGM: FISH) - Looking to add more shares at current price or lower Closed out DLR to book small loss and will revist in 31 days. This was a top 6 position in the portfolio (about a 4% holding) so the proceeds will be distributed among the stocks listed above. All have better and/or equal distributions as DLR. QTS is a "cloud" REIT similar to DLR but w/ 100% U.S. domestic coverage (no foreign country exposure). According to the prospectus the first year distribution is $1.16/unit or about 5.4% at the current price of $21.50/unit. EPB had their conference call and their Gulf LNG project was postponed by 4 months. This project is why I am building up the position. The stock sold off even w/ a distribution raise (negative coverage first two quarters then positive for rest and complete year). However, when the Gulf LNG project is completed and operational, future distributions will grow. That assets becomes more valuable if/when they obtained signed delivery contracts out 5 and more years which will eventually come. FISH is is a yet to be discovered MLP NG gather w/ assets located in the North Central shale region (see earlier posts). It would be considered a small cap MLP w/ lots of room to grow and very nice 1st year distributions. The company is only running at about 65% of capacity so there is room to grow revenues w/o significant capital expenditures. FISH also becomes a buy out and/or merger candidate as the NG gather consolidation continues. The larger MLP's must spend 98% of their FCF to remain as a qualified MLP so it is just a matter of time that the little fish get consumed by the big players. You generally get MLP units from the acquirer rather than cash and a small premium. This occured w/ RGP acquiring PVA. The net result was a more diversified MLP w/ slightly lower distributions but a better overall balance sheet and better operating efficiencies. I will still maintain some "cloud" REIT exposure but have increased the portfolio exposure to more NG MLP infrastructure plays. The overall exposure is still small. I would like to have at least 35% of the portfolio in this sector. EKS

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