Our FREE Investing Newsletter
    Get Exclusive Summer Sale Discounts

    By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails. All Hedgeye products and services are subject to Hedgeye’s Terms of Service available at www.hedgeye.com/terms_of_service

Macquarie Infrastructure (MIC) shares were down as much as -38% today on news the company cut its dividend by 31%.

Hedgeye Energy analyst Kevin Kaiser added MIC to his Best Idea short list in late January 2017. Since then shares have nearly halved.

“MIC’s aggressive dividend payout is counter-productive to value creation,” Kaiser wrote last year. “Most other MIC analysts value the Company with some yield-based framework, which we believe is lazy and ill-advised. Valuing a highly-leveraged, cyclical business by capitalizing a return-of-capital dividend is a portfolio disaster waiting to happen!”

In the video above (from February 2017), Kaiser lays out his short thesis. “The company is already 4.9x levered, with a super aggressive dividend payout,” Kaiser said. “It doesn’t take a lot to go wrong for this to get very ugly.”