Blog - SL-Advisors

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EUROPE’S ENERGY CRISIS IS KEEPING ENERGY PRICES AND INFLATION HIGH

America leads the world in oil and gas production. We believe midstream energy infrastructure offers predictable cash flows to investors..

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Valuing MLPs Privately — Enterprise Products Partners

November 11, 2018/3 Comments/in Midstream Energy Infrastructure/by Simon Lack

MLP valuations show that the trust of the traditional MLP investor has been lost, perhaps irretrievably. In Kinder Morgan; Still Paying for Broken Promises, we showed how that company’s history of investor abuse via two distribution cuts and an adverse tax outcome continues to weigh on its stock price. In Magellan Midstream: Keeping Promises But […]

What the Midterms Mean for Stocks

November 7, 2018/0 Comments/in Global Issues/by Simon Lack

Equity returns are historically strongest in the year following the midterms. Conspiracy theorists will judge that politicians in office focus on market-friendly moves that aren’t limited to government spending in order to stay in power. Whatever the reason, the effect is quite remarkable. Since 1960, the S&P500 has risen by 15.9% on average in the […]

Magellan Midstream: Keeping Promises But Still Dragged Down by Peers

November 4, 2018/1 Comment/in Midstream Energy Infrastructure/by Simon Lack

Many MLP management teams have pursued growth at the expense of honoring their promise of stable distributions. We think the sector’s persistently high yields need explaining. Last week’s blog post (Kinder Morgan: Still Paying for Broken Promises) drew thousands of pageviews and over a hundred comments on Seeking Alpha. Although Kinder Morgan (KMI) got there […]

Bonds Still Can’t Compete with Stocks

October 31, 2018/0 Comments/in Bonds Are Not Forever/by Simon Lack

The Equity Risk Premium (ERP) is a handy way to compare valuations of equity with fixed income. It compares bond yields with the earnings yield on stocks (the earnings yield is reciprocal of the price/earnings ratio). Six years ago, when the Fed was well into quantitative easing and bond buying, it gave a clear signal […]

Kinder Morgan: Still Paying for Broken Promises

October 28, 2018/1 Comment/in Midstream Energy Infrastructure/by Simon Lack

Broken promises aren’t quickly forgotten. That’s the hard lesson being learned by pipeline company managements, as the sector remains cheap yet out of favor. Kinder Morgan (KMI) reported good earnings on October 17th. Volumes were up, and they sold their Trans Mountain Pipeline (TMX), including its expansion project, to the Canadian Federal government. TMX is […]