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

To: Elroy who wrote (66597)	2/21/2021 2:38:29 AM
From: bruwin	1 Recommendation Recommended By JohnyP Read Replies (2) \| Respond to of 78817

Dude {;-) .... You're more of the expert on MLP's than I am. I've never traded them. Personally they look far too risky and uncertain for me, but that's just me. However, from what I see, the "Key Number" to start with is EBITDA (not "Net Income" as with a Public Company), which is something I do know how to calculate when it comes to Public companies. I calculate it from the "Top" down, not from the "Bottom" up as it appears to be done in UAN's filings. So based on $7/unit for 11,099 million units, the "Available Cash for Distribution" has to be about $78 mil. for 12 months or about $20 mil. per Quarter, as a "round number". If one looks at UAN's calculation for the Sept. 2020 Quarter we have :- So, based on "all things being equal", we get EBITDA to be "$40,855". So based on that previous calculation I did using UAN's "Gross Profit" being about 28% of its Total Revenue, and its SG&A being "$4,232" as reported, and once again, "all things being equal", working backwards from EBITDA we have :- So it seems that UAN needs a Quarterly "Total Revenue" at least somewhere in the region of $161 million, or about 161 x 4 = ~$644 million for the 12 month period, to provide a $7/unit distribution based on that calculation for EBITDA. That is slightly more than double the $79,4 million that UAN reported for Sept. 2020. Needless to say, you and E_K_S are far more adept at "digging into the weeds" for the interrogation and forecasting of Costs and Revenues for MLP's having been involved with this form of investment, but that's just my more simplistic approach .......

To: Elroy who wrote (66597)	3/3/2021 12:19:10 PM
From: Lesser_Ape	Read Replies (1) \| Respond to of 78817

Elroy, I think your math might be wrong on UAN because the numbers don't seem to match up with what happened historically. You can see historical UAN32 prices in the DTN Retail Fertilizer trends report chart from Feb 24 that you posted earlier. So, in Q1 2019, UAN32 had a higher retail price than it does now. To reach that level again, we'd need another increase in UAN32 price that's almost comparable to the price increase we've already had this year. But you can look at UAN's Q1 2020 earnings press release which has 2019 comparable numbers. Those numbers indicate that UAN wasn't throwing off tons of cash flow in Q1 2019, but was losing $6M in that Q. And the share price was in the mid-30s range. My guess about the disconnect is that you're assuming that UAN gets retail price when it sells UAN32. Then, when you calculate the increase in price, I suspect you're subtracting the current retail price of UAN32 (recently $288) from the lower non-retail price that UAN put in its 2020 Q3/Q4 earnings releases, and concluding that the price of UAN32 has really skyrocketed. But in fact, on that chart, UAN32 is just selling for about the 5-year average price. Or maybe I'm messing up the math somewhere. That's possible too.