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Strategies & Market Trends : Value Investing
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To: Wallace Rivers who wrote (53376)2/11/2014 11:17:30 AM
From: E_K_S  Read Replies (1) of 78750
 
I have had my share of blow-ups, that's going to happen if you stay in the game for long periods of time.

Re: Boardwalk Pipeline Partners, LP (BWP) - A value and/or value trap?

Me too! Most recently w/ BWP where I made some very small buys in January 2014 at/near 52wk lows and find out that on Monday the management cut their distribution, reported a 29% decrease in revenues primarily due to new service contract renewals at lower than expected rates.

I continue to like their core group of assets, specifically the new investments they are making but their older assets are not generating the revenues expected due primarily to reduced transportation rates. The company cut their distributions substantially to utilize their cash flows to (1) reduce debt resulting in less leverage and (2) to finance the 2014 CapX in their bluegrass project.

Their continued investment in the Bluegrass project will not book any substantial new revenues for the company until 2015, so as a result the stock sold off more than 49% on this news.

As a value investor (and/or foolish bottom feeder), I increased my position by 62% betting that on/after 2015 both revenues and distributions will begin to increase. I will evaluate this in 31 days and may sell a few of my high priced shares, book a loss but maintain my position of this company in my MLP basket.

EKS
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