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

To: Spekulatius who wrote (52838)	11/19/2013 9:58:12 PM
From: Jim P.	Respond to of 79022

I agree buy the GP. I do own it but have sold most of it as the last 2 acquisitions have pushed out distribution growth, increased overall risk and I am waiting to see if they waste capital on another purchase. West Texas NGL Line, Coal bed methane and the Eagleford assets did not cover cost of capital plus GP at 50/50 split hence no distribution growth beyond organic growth. I think the CEO is trying too hard to do deals and until he retires the risk is too much leverage at the beginning of a down cycle. I think there is enough risk that the cycle in product prices and drilling economics will slow the growth into the new debt load at the LP level or interest rates will rise and any units issued will be dilutive compared to current debt financing levels. If they can hang on until 2017 or 2018 with decent growth the ethane market should firm up and we may actually see natural gas above $4.50 a million btu's. I will certainly keep a close eye on all 3 Atlas companies but there may be some bad timing issues between now and new ethane crackers, natural gas export and domestic consumption increases, and lastly possible condensate glut account the Eagleford wet gas drilling. jim