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Strategies & Market Trends : Value Investing
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To: Spekulatius who wrote (53404)2/13/2014 8:43:07 PM
From: Mattyice2 Recommendations

Recommended By
E_K_S
Spekulatius

  Read Replies (1) of 78705
 
BWP - I continue to be in the boat that I hate these companies and there structure. The structure is so flawed imo... i have talked about it in the past. These bad boys are essentially insert MLPs for REITS in the early 70s and viola!! a ticking time bomb waiting to implode.

But I regress and here is another case that a company I have really disliked, the assets have been terribly positioned for the past 5ish years (should have shorted the dang thing) - is somewhat now trading at a reasonable value even if you use doomsday scenarios. They have just got tripled wammied with initially being overinflated positioned to transport all this haynesville gas and having key storage assets along there Texas gas, boardwalk, and gulf south systems when storage was loved. To all of this gas essentially disappearing seemingly overnight and a Texas gas and boardwalk interstate facilities that was transporting gas north where a market was already saturated with gas. This is along with a dynamic Gulf South Pipeline that operates in the Louisiana/Miss/Ala industrial corridor that is damn near empty. If the renaissance in industrial manufacturing is just starting, i'm bound to think gulf south is positioned to capture this.

I see two things happening... the first is boardwalk reversing course along with the other interstates to start moving gas back south. Where demand and the premium market (henry hub) seems to possibly have turned the corner.

IMO - They have the assets and flexibility to capture the shift in US gas with pretty public talks about utilizing a big portion of their assets for the onslaught of liquids that are about to come out of the central-eastern part of the US. There is ZERO takeaway capacity for liquids out of the Marcellus. There bluegrass project which i'm not to familiar with sounds promising (not to mention williams doesnt just swing a big stick for nothing)
The other is that they have some decent storage facilities along there Texas gas system. I'm not sure if yall are aware but storage is absolutely hated, if you have storage you are essentially losing money hand over fist, and until recent volatility it has been useless for the people who have it. I think this could eventually change. I'm not sure if we have got to the washout period in storage, but if i was a big boy (cough cough kinder) i wouldn't mind picking up some storage assets on the cheap.

All in all with L behind them, some cheap assets that could be sold for cash if needed i think there is some value around this level after the recent sell off. I might like it a little more at $4-5 cheaper but i'm definitely keeping it on the radar. I think Spek is pretty spot on and has good feel for what is happening.

From a big picture perspective, this is a classic case of buying low in a company who 'seems' to possibly have no future and selling high plus getting paid a little to hold the palette... i'm thinking of buying some pipeline units in two companies now... what in the heck is happening!
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