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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (38899)	8/21/2010 11:24:28 AM
From: E_K_S	Read Replies (2) of 78748

Hi Spekulatius - RE: Williams Companies, Inc. (WMB); Cheniere Energy Partners, LP Ch (AMEX: CQP); BreitBurn Energy Partners, L.P.(NasdaqGS: BBEP) I have a small position in WMB that I bought 9/29/2009 at $18.25/share. It may be one I might want to add to again. It's selling under it's 200 day MA of $25.00/share which is my initial short term price target. However, as you stated, their Midstream operation looks fairly cheap and if NG prices run higher the stock could test their 2007-2008 valuation levels of $35/share-$40.00/share more than a double from current levels. I did not realize they owned so many acres in the Marcellus shale area. Their land assets are a good way of owning potential reserves while their cash flow generators (Midstream and pipeline operations) bring in the money. I originally bought them for their Gas Pipeline segment and their Midstream gas gathering business. Two new MLP's that I am looking at are Cheniere Energy Partners, LP Ch (AMEX: CQP) and BreitBurn Energy Partners, L.P. (NasdaqGS: BBEP). finance.yahoo.com Both have had a good run and each generate good cash flow. Paul has mentioned BEEP on this board but I have not seen anyone discuss CQP. I am looking at selling some of my recent utility gainers and starting a position in each of the MLP's. They generate good income and have a possible up side of 10%-15%. CQP also has the ability to increase their distributions once they ramp up their receiving terminal LNG volume. cheniereenergypartners.com CQP plays into the LNG theme. Chevron and Total SA (TOT) are each 25% partners with 20 year Terminal Use contracts valued at $252 Million. Therefore the MLP cash flows s/b pretty stable. It's sort of like a midstream pipeline distribution business but the distribution hub is around a terminal rather than gathering tanks out in the field. I like the reoccurring revenues that a distribution operation generates. It's consistent and not really affected by the price of the commodity. Revenues increase as volumes increase and as you expand the overall system capacity. What possible downsides do you see in any of these MLPs? EKS

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