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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (52830)	11/19/2013 2:11:22 PM
From: Paul Lee	Read Replies (2) \| Respond to of 78627

anyone following Clean Energy CLNE

To: E_K_S who wrote (52830)	11/19/2013 7:46:05 PM
From: Jim P.	2 Recommendations Recommended By E_K_S Spekulatius Read Replies (1) \| Respond to of 78627

I follow APL closely and find the current price very attractive. I also think that APL overpaid for the Eagleford assets and it will take a couple of years to digest. Permian assets anchored by Pioneer Energy are going to be the big driver going forward. Growth in distributions have a lot of headwind when they get past and IDR giveback which at current share count starts about 65 cents and ends at 70 cents. This gets APL to about $40 with a 7% yield. After that IDR's are at a 50/50 split and do not trust that the General Partner ATLS will not try to buy another overpriced asset to increase the IDR's while increasing the risk of the limited partners. Should be a fairly nice ride to $40ish but after that I would be careful that the GP will buy assets that are not a creative to LP unit holders as has happened with the Eagleford assets. If you are familiar with current management then you would remember the Anadarko acquisition that occurred near the top of the market for processors in 2007. Almost buried the company while Marcellus shale bailed the company out a few years later. Eagleford assets anchored by Talisman Energy. About the weakest most inconsistent operator out there. They will anoint their 3rd CEO and another corporate direction soon and this since I started following in 2007. Citi may have had some interest in this last purchase and I have not looked. I am a bit jaded when it comes to paying over a billion $ for a small gathering system and one 200 million a day processing plant that is not yet full. The math is not that complicated. To gross the 2014 advertised EBITDA of $160 million they must get (2) 200 million cubic feet a day plants up and running full and charge over 80 cents per 1000 cubic feet gathered and processing in fees plus another 20% kicker in condensate. Will not happen is my opinion. Expect APL miss next year and growth in the Permian bailing them out in 2015. jim