BreitBurn Energy Partners (BBEP)
From Cabot Wealth Advisory 8/20/12 Sign up for free Cabot Wealth Advisory e-newsletter
A Master Limited Partnership (MLP) with a $1.3 billion market cap, BreitBurn Energy Partners (BBEP) is an independent oil and gas limited partnership with crude oil and natural gas reserves in the Los Angeles Basin in California, the Wind River and Big Horn Basins in central Wyoming, the Powder River Basin in eastern Wyoming, the Evanston and Green River Basins in southwestern Wyoming, the Sunniland Trend in Florida, the Permian Basin in Texas, the Antrim Shale in Michigan and the New Albany Shale in Indiana and Kentucky.
I like this stock's very high dividend yield of 9.80%, its very low short interest at 1% of float, its strong balance sheet with debt interest coverage at a 4.8 multiple, and its debt-to-capitalization ratio of 34%. BreitBurn Energy Partners's production profile is weighted to natural gas at 58%, which is expected to fall to 53% in the second half of 2012. Oil-to-natural gas revenue was roughly two-to-one in 2Q12. The company's operating cash flow after capital spending in 2Q12 and for the full-year 2011 was positive at $62 million and $64 million, respectively.
BreitBurn reported $1.29 EPS for the 2Q12 beating expectations by $1.09, and quarterly revenue was up 244.1% on a year-over-year basis. Total oil and gas production increased 18% year-over-year, with oil/natural gas liquids up 4.2% and natural gas up 29% year-over-year.
BBEP is trading above its 50-day and 200-day moving averages, with the 50-day above the 200-day. Immediate support is 18.16 at the 200-day, and longer-term support is 17.79 at the 200-day.
My price target for BBEP is 21.75 per share over the next six months. I recommend that you start with small purchases now and look to buy more on pullbacks toward support. Invest for the long-term, take the dividend at 9.8% and be patient. Place a firm stop loss order at 17.00. BUY. Click here for more information.
|Breitburn Energy Partners L.P. (BBEP)
515 South Flower Street, Suite 4800
Los Angeles, CA 90071
|Index Membership: N/A
Sector: Basic Materials
Industry: Oil & Gas Drilling & Exploration
Full Time Employees: 395