I’m filing this update from the beach. I’m on vacation the week of March 29 April 2. Unless the sun stops shining here in the Bahamas (or the kids decide to hire themselves out on a fishing boat), I don’t anticipate filing more than once a day for this week. JubakPicks.com will go back to its normal schedule on Monday April 5.
Update Energy Transfer Partners (ETP)
Energy Transfer Partners (ETP) has hit my $47 target price just about on schedule. But I don’t see any reason to sell these master limited partnership units out of Jubak’s Picks quite yet. As I wrote in July 2009, “The longer the Federal Reserve promises to keep interest rates low, the more valuable Energy Transfer Partners (ETP) is and the longer I want to hold it.” The Fed’s target for shorter interest rates is still at 0% to 0.25% and the promise is still to keep rates at that level “for an extended period.” Long-term interest rates have begun to push upward in anticipation of an eventual change in Fed policy, or inflation, or the depreciation of the dollar, or whatever, but the 7.84% yield on these units is still comfortably ahead of that increase. (For more on Federal Reserve policy see my post https://jubakpicks.com/2010/03/16/fed-holds-interest-rates-near-0-but-continues-to-reduce-role-in-the-markets/ )
So what’s ahead for Energy Transfer Partners?
The partnership has completed or is nearing completion on one set of new pipelines. Those are likely to push EBITDA to $1.8 billion in 2010, according to Standard & Poor’s. That puts the partnership in a position to pursue acquisitions or new capital spending that tie new natural gas production regions such as the Marcellus Shale and Haynesville geologies into its existing pipeline system.
As of March 30, 2010, I’m raising my target price to $52 a share by November 2010.
Full disclosure: I own shares of Energy Transfer Partners in my personal portfolio.
JohnErskine,
I’ll tell you why I’m not hopping onto gold at the moment. IF we run into a double dip recession, and I have no reason to believe we won’t, then gold will drop, perhaps significantly. Only then will the government get serious about the economy, and then we MIGHT see some true economic stimulus (feeding money to the banks so they can keep it in their reserves does not qualify as “economic stimulus” in my book).
Then I’ll buy some gold and make a killing in it like I did last year. Until then I’ll stick to precious metals with industrial applications, and with limited downside.
Good people: I am carrying a small position in precious metal mining stocks. I have made 2 fairly recent buys of GG, a lower tier player NXG, on the gold side and Impala on the platinum side. The GG has recently sunk to about 7% below purchase price, NXG is up over 25%, and Impala is up about 18%. All of these positions seem to be keepers for the long term. While it is true that gold can make big moves up and down for the smallest reasons; It is also true that the US economy is now biased toward long-term inflation which can’t help but push up precious metals!