I wouldn't bet that IEP sells CRV Energy. IEP get's past the 40 Act by owning CRV in the same way that Berkshire Hathaway gets around the 40 Act by owning GIECO.... BRK isn't selling GEICO ever for that reason and neither would IEP. If IEP were to sell CRV they would need another large operating asset to take its place otherwise be subject to the 40 Act as a closed-end fund trading securities.
Hi, subscriber here. Cn you please send me your xls for your analysis? pker28@live.com
Also, curious to your updated opinion on this stock now that it has rallied significantly. Distributions were lower than expected however, they did retire debt.
I wonder if you have an idea how many of the European competitors have gone offline because of the high natural gas prices in Europe and how this would affect the bottom line of $UAN. Seems like the spread between European and US natural gas prices seems to widen almost every single week.
On input costs: I see you plugged NatGas at 4$ for 2022. What happens if the strip is much much higher, at say $8? I assume it still hurts competitors more than them and somewhat offset by implied higher fertilizer prices?
Second input, pet coke, you say 1/3 has ceiling at 40$. What is the ceiling on the rest 2/3? I am not familiar with what pet coke prices driven by- refining activity?
I think this a great, clear idea and I'm kicking myself for not doing a little more work on my annual look at UAN in January. Oh, well. Apart from input disruptions, the one thing that occurs to me that could derail this playing out exactly as you map out is an unplanned outage. Obviously can't plan for that, but it's just one thing to keep in mind.
If memory serves, the Rentech assets when acquired were a little hinky because of deferred maintenance (I could be wrong on this). I'd imagine that's all in the past, but these plants are still hot and dangerous, with massive operating leverage that cuts both ways. Not really an original or value-add thought by me, but a fire or mechanical failure (they deferred some of the turnaround this year, though I imagine that's fine) is no small thing.
But like I said, great idea; thanks. Gonna have another look and will probably end up buying some myself.
I wouldn't bet that IEP sells CRV Energy. IEP get's past the 40 Act by owning CRV in the same way that Berkshire Hathaway gets around the 40 Act by owning GIECO.... BRK isn't selling GEICO ever for that reason and neither would IEP. If IEP were to sell CRV they would need another large operating asset to take its place otherwise be subject to the 40 Act as a closed-end fund trading securities.
Hi, subscriber here. Cn you please send me your xls for your analysis? pker28@live.com
Also, curious to your updated opinion on this stock now that it has rallied significantly. Distributions were lower than expected however, they did retire debt.
I wonder if you have an idea how many of the European competitors have gone offline because of the high natural gas prices in Europe and how this would affect the bottom line of $UAN. Seems like the spread between European and US natural gas prices seems to widen almost every single week.
What are the odds you are willing to provide an update on this ?
Do you have some updated thoughts on this? Seems likely they are going to get close to $55 in distributions for 2022 with the higher pricing.
5/22 call options - why did you opt for the May expiry timing?
Where is the source of the $38/unit guaranteed cumulative distributions please?
On input costs: I see you plugged NatGas at 4$ for 2022. What happens if the strip is much much higher, at say $8? I assume it still hurts competitors more than them and somewhat offset by implied higher fertilizer prices?
Second input, pet coke, you say 1/3 has ceiling at 40$. What is the ceiling on the rest 2/3? I am not familiar with what pet coke prices driven by- refining activity?
Thank you for the write up.
I think this a great, clear idea and I'm kicking myself for not doing a little more work on my annual look at UAN in January. Oh, well. Apart from input disruptions, the one thing that occurs to me that could derail this playing out exactly as you map out is an unplanned outage. Obviously can't plan for that, but it's just one thing to keep in mind.
If memory serves, the Rentech assets when acquired were a little hinky because of deferred maintenance (I could be wrong on this). I'd imagine that's all in the past, but these plants are still hot and dangerous, with massive operating leverage that cuts both ways. Not really an original or value-add thought by me, but a fire or mechanical failure (they deferred some of the turnaround this year, though I imagine that's fine) is no small thing.
But like I said, great idea; thanks. Gonna have another look and will probably end up buying some myself.
what are the tax implications of the distributions?
how did he get to the $38 in distributions in the next 3 quarters? I don’t see that?