New Best Idea: SHORT BPT

We are adding SHORT BP Prudhoe Bay Royalty Trust (NYSE: BPT) to our Best Ideas list.

 

BPT is an extremely overpriced oil royalty trust - our Base Case NAV is $33/unit, implying ~58% downside from the current price of $77/unit.  The undiscounted sum of the future distributions is only $46/unit.  According to our estimates, BPT will pay its final distribution in 2024 and then terminate (with immaterial residual value). 

 

SHORT BPT is a rare, asymmetric risk/reward opportunity.  (And a short negative carry trade if the oil price risk is hedged.)

 

Click here for FULL REPORT: Hedgeye Short BPT 1-15-2014

 

We'll host a quick conference call TODAY at 2pm EST to hit the key points and take questions.  Send any questions over to .

 

Dial-in:

Code: 763917#

 

Kevin Kaiser

Managing Director


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