Entries by Simon Lack

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Buybacks: Why Pipeline Companies Should Invest in Themselves

Weakness in the pipeline sector over the past couple of years has caused soul-searching and changes to corporate structure. Incentive Distribution Rights (IDRs), which syphon off a portion of an MLP’s Distributable Cash Flow (DCF) to the General Partner (GP) running it, have largely gone. Many of the biggest MLPs have abandoned the structure entirely, […]

Leaderless Britain Stumbles Towards Brexit

Although it’s 36 years since I last lived in England, I retain a deep affection for the country where I grew up, as well as my English accent (so say my American friends, anyway). I’m often asked my opinion of Brexit – I have British friends on both sides of the Leave/Remain divide. While I […]

Environmental Activists Raise Values on Existing Pipelines

Canada’s struggles to get its crude oil to market have been a source of immense frustration if you’re an Albertan oil producer, or a huge success if you’re an anti-fossil fuels activist. Last week, Alberta’s premier Rachel Notley imposed almost a 9% cut in production in order to raise prices. Shortage of available infrastructure had […]

Steel Tariffs Show Up in Surprising Places

The G20 meeting on the weekend produced a mildly surprising rapprochement between the U.S. and China on trade. Most commentators regard the Administration’s serial imposition of tariffs negatively. Stocks certainly liked the possibility of a lower temperature around this rhetoric. In spite of the U.S.’s many trade disputes, the economy shows little sign of suffering. […]

MLPs Lose That Christmas Spirit

Around this time of the year we typically write about MLP seasonals. That’s because the “January effect” has been an enduring pattern of investor activity, far more pronounced than in the broader equity market. Prices would reliably dip in November before firming in December and shooting higher in January. This was due to the combination […]

Lower Volatility Stocks Gain Favor

Low volatility is outperforming. In a rising market, taking more risk usually pays off. The recent reversal has investors seeking tangible value. Nothing exemplifies intangible value, or more accurately ephemeral value, better than Bitcoin. The great Risk On trade began the day of Trump’s election victory, when an overnight market swoon quickly reversed. Bitcoin buyers […]

Energy Transfer: Cutting Your Payout, Not Mine

Too few writers covering energy infrastructure admit to the many distribution cuts inflicted on MLP holders. Instead, they identify numerous other problems whose resolution will draw in buyers. Incentive Distribution Rights (IDRs), the payments made by MLPs to their General Partners (GP), have drawn scorn for the past couple of years. Eliminating them is fashionable […]

FANG Goes Bang

“FAANG” stocks (Facebook, Amazon, Apple, Netflix and Google, now called Alphabet) were rising for most of the year. For investors who didn’t find that exciting enough, BMO Capital Markets Corp helpfully issued the MicroSectors FANG+ 3X Leveraged ETN (FNGU). As the name suggests, it gives you three times the daily return on these, plus another […]

Oil and Gas Take Center Stage

If pipeline stocks moved with natural gas rather than crude oil, their long-suffering investors could look back on a good week. On Tuesday crude was down $5 per barrel for the week, before recovering $2 by Friday. It’s tumbled $20 since early October, bringing Brent Jan ’19 to $66. By contrast, the Jan ’19 natural […]

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