SHORT BreitBurn Energy Partners (BBEP)
SHORT Pacific Coast Oil Trust (ROYT)
CALL TODAY AT 1PM EST to discuss our theses on these two names.
- Toll Free Number:
- Direct Dial Number:
- Conference Code: 973882#
- Materials: CLICK HERE (slides will download prior to the start of the call, email if issue)
- Send questions to
Excerpt
We believe the high-yield energy equity space to be rich hunting grounds for short/sell ideas.
The performance of Master Limited Partnerships (MLP) is particularly representative of the 2009 - 1H13 yield chase.
But behind the guise of what are commonly pitched to retail investors as low risk, high yield fixed-income alternatives, we are finding many instances of aggressive and irregular accounting (in most cases, non-GAAP measures and other “management metrics”), poor corporate governance, and grossly overvalued securities. Many of these companies trade at ~30 - 50x earnings with low organic growth prospects, have low-to-negative FCF yields, and pay dividends/distributions well in excess of earnings or free cash flow.
Our recent work on the short sides of LINN Energy (LINE, LNCO) and EV Energy Partners (EVEP) has provided a solid base to work from - we know what to look for.
This report focuses on two high-yield energy short ideas: BreitBurn Energy Partners (BBEP) - an upstream MLP - and Pacific Coast Oil Trust (ROYT) - a BreitBurn-affiliated trust that is trading at 2x our 3P NAV.
Kevin Kaiser
Senior Analyst
