Wednesday, July 21, 2010

Add to Watchlist: Take A Look At MLPs...

Check out Master Limited Partnerships.
 
     MLPs are limited partnerships that are publicly traded.   One of the most crucial criterion that must be met in order for a partnership to be legally classified as an MLP is that the partnership must derive most (~90%) of its cash flows from real estate, natural resources and commodities.
     The advantage of an MLP is that it combines the tax benefits of a limited partnership (the partnership does not pay taxes from the profit - the money is only taxed when unitholders receive distributions) with the liquidity of a publicly traded company.
We have had:
K-Sea Tranportation (KSP),
Eagle Rock Energy Partners (EROC) and
Navios Maritime Partners (NMM)
in Working Accounts for awhile and are having fun in Spec.  Make them a part of a Cash Dividend Strategy.  Regardless the price of oil, it'll still need to be shipped.  It's a funny reason for Buying In, but we've made enough money on these to "laugh all the way to the bank".  As an adjunct, we're Twice as Heavy IN Teekay Offshore Partners (TOO).

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