One of my newest positions, ETP, co-reported earnings (alongside ETE, a familial body) that rose 50% year over year, soundly crushing estimates. The partnership is putting out almost 7% in distributions annually and distributable cash flow lifted 11%.
The partnership is modestly priced and more than a fair buy here. The only conceivable issue in the report I saw was that they’re paying out a little more in distributions than they take it, at the moment (and not for long if this kind of growth keeps up). And a little over a month ago ETP announced plans to build a new pipeline from the figurative gold mines in the Bakken region in North Dakota to their existing distribution network in Illinois…and the new capacity is allegedly already filled.
So following what can only be described as a stunning performance, the market is roundly bidding up units of ETP, correct?
WRONG
ETP has given back all the morning ramp following the exciting earnings beat, and ETP is now struggling to hold just half a percent gain on the day.
That’s just the kind of market we have right now. You can hear the oxygen rushing out of the trading floor. I have a couple similar positions that have all left analyst estimates in the dust (mostly after having already been revised higher), and yet they just can’t catch a bid.
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