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Non-Tech : Genesis Energy (GEL - diversified energy MLP) chat spot
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To: Elroy who wrote (1)1/29/2024 9:54:32 AM
From: Elroy   of 5
 
One reason GEL is interesting to me is......

I've been invested in NGL (another diversified MLP) for about two years. NGL is a turnaround story, with a battle between it's reasonably strong and improving business against an over extended balance sheet. NGL has spent the previous 18 months delevering, and the market has changed from one year ago (NGL is going bankrupt) to today (NGL is easily going to survive).

NGL and GEL balance sheets look remarkably similar.

Both have about $3 billion long term debt, which has just been refinanced.

Both have about $900m preferred stock.

GEL's preferred stock is current, while NGL's is in arrears with about $300m due to make it current.

Both partnerships have lines of credit.

NGL has trailing EBITDA of ~$630m and GEL has trailing EBITDA about $100m higher than NGL.

It is interesting, because if things move forward as expected NGL's financial performance a year from now should loo similar to GEL's financial performance todaty. Today GEL's balance sheet is stable, preferred are current, and GEL has trailing EBITDA of about $710m. Today NGL has a $300m preferred obligation to pay, and trailing EBITDA is about $630m. A year from now, NGL's balance sheet should be stable, NGL's preferred should be current, and NGL may have trailing EBITDA of about $710m

So........GEL's unit price today ($12) is a decent price target for NGL's unit price one year from today.
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