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Strategies & Market Trends : Value Investing
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To: E_K_S who wrote (43191)7/5/2011 3:51:37 PM
From: Spekulatius  Read Replies (2) of 78719
 
Why going into the pipeline sector now that there is a feeding frenzy. i don't think that paying 15x EBITDA is a recipe for good performance. If interest rates go up, this sector is going to get whacked, imo. Every once in a while pipes can be bought for 8x EBITDA (this was the case in 2002 and then again in 2008). that's when they should be bought, not know.

If anything, i would look for ETE on a pullback. It's the GP for ETP and while ETP has issues with dilution, more ETP unit just mean a higher cut for the General partner (ETE), as long as the yield for ETP is high enough to stay above the 50% GP threshold (below that it will get really ugly for the GP though).
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