5-Hour Energy: A Success Equal Parts Caffeine, Chemistry and…
Suddenly, Amazon Doesn't Love Its Moms Anymore"We don't have to leave the US to find plenty of bargain buys in partnerships and pass-throughs," says Neil George in his new specialty service designed for income investors, The Partnership Letter.
In his search for "solid, heavy-cash-generating assets," the advisor takes a look at two of his new portfolio holdings, Kinder Morgan Energy Partners (NYSE: KMP) and Kinder Morgan Management (NYSE: KMR).
"Right now plenty of partnerships and pass-through entities in the US and around the world are down in price. The real work comes in finding and buying partnerships that have solid, heavy-cash-generating assets that make for bargains.
"And they need to pass two other tests. The first is that they need to be financially sustainable. With the ongoing credit crunch, partnerships we own need to be able to carry themselves without having to face a cash crunch.
"The second test is one of business sustainability: Can the operation behind the partnership keep running and expanding even if the global economy slows? are widely held by investors. And though neither has been relegated to the bargain, both represent solid deals.
"Kinder Morgan Energy is a traditional, cash-generating partnership that operates in the midstream segment of the petrol patch and is involved in other areas of the energy market, such as coal.
"With pipeline and processing assets in key markets around the US, little in the way of energy moves without it garnering a piece of the business and generating ample cash for unitholders.
Kinder Morgan Energy Kinder Morgan Management is a payment-in-kind (PIK) partnership ideal for qualified accounts such as IRAs. The share-price performance for both has been positive of late, but both remain good deals that present a lower level of near-term risk.
"What make them deals are their predictable cash flows and their steady, sustainable dividends. Kinder Morgan Energy pays in cash at a rate of 6.3%, a rate which has climbed by about 7% a year for the last five years; Kinder Morgan Management pays a similar amount in the form of additional shares.
"Buy traditional cash generator Kinder Morgan Energy Partners up to 70 and the payment-in-kind Kinder Morgan Management up to 70."
Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
