SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

   Non-TechUAN - The variable distribution MLP that could go a long way


Previous 10 Next 10 
To: Area51 who wrote (788)6/28/2023 2:35:23 PM
From: Elroy
   of 811
 
My concern now with UAN is I have zero confidence that UAN fertilizer prices will go up after the "Summer Fill" Q3 price is set.

If UAN fertilizer prices can decline from November 2022 to today, through planting season, what's the reason to believe they will increas from Aug/Sep on? How do we know they won't just keep dropping to the floor for another 6-12 months?

Without increasing fertilizer prices, UAN is a bad investment. How can you or me or we be confident that prices will go up seasonally as they normally do since the past six months was six months of normally seasonally strengthening prices, but prices didn't go up, they instead collapsed.

How do you know the price collapse is over?

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


From: Elroy6/28/2023 4:47:29 PM
   of 811
 
DTN Retail Fertilizer Trends
Nitrogen Products Lead Retail Fertilizer Prices Lower


https://www.dtnpf.com/agriculture/web/ag/crops/article/2023/06/28/nitrogen-products-lead-retail-prices

Share RecommendKeepReplyMark as Last Read


To: Area51 who wrote (788)6/28/2023 4:48:56 PM
From: Paul Senior
   of 811
 
Thanks for the post.

I'm still have units, but have reduced position with a view to maybe adding back after 3rd quarter.

Share RecommendKeepReplyMark as Last Read


To: Elroy who wrote (789)6/29/2023 1:42:57 PM
From: Area51
   of 811
 
Well I don't know that the price collapse is over (it's dangerous to make predictions especially about the future <g>). But I think if demand for UAN stays strong (which correlates roughly with corn over $5 for upcoming crops) the Publius analysis seems like a reasonable extrapolation of what future UAN results might look like.

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Area51 who wrote (792)6/29/2023 8:32:46 PM
From: Elroy
   of 811
 
But I think if demand for UAN stays strong (which correlates roughly with corn over $5 for upcoming crops) the Publius analysis seems like a reasonable extrapolation of what future UAN results might look like.

I don't think we can say much of anything about future prices for fertilizer. They have collapsed over the past six months, as we have been moving through the high demand seasonal period. Whether the future will bring higher or lower prices than today, I have no idea.

So with a stock where I really have no idea about future prices (and therefore revenues), I am more inclined to give it a pass rather than express any confidence in future performance.

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Elroy who wrote (793)7/1/2023 1:42:33 AM
From: Area51
   of 811
 
<<I don't think we can say much of anything about future prices for fertilizer.>>

But as an astute investor once so eloquently stated; ( Message 34159272 ) Sure, it's possible fertilizer prices collapse toward the 2016-2020 lows. But.....why would they?

Significantly lower corn prices might do it (and Friday was another disaster on that front, now sitting percariously close to the $5 per bushel level where I will have to start to worry about it).

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Area51 who wrote (794)7/24/2023 4:23:46 PM
From: diegosan
   of 811
 
Earnings to be released 7-31-23 after the close. Diego

Share RecommendKeepReplyMark as Last Read


From: Elroy10/10/2023 8:27:50 AM
   of 811
 
I've still got a small chunk of UAN which is exposed to short Nov covered calls at $80 and $85. Naturally, UAN's unit price has been sitting at about $82 for months!

I may still own this guy depending on how these covered calls progress. Oddly, I'm rooting for bad news for the Q3 results, hopefully pushing the price below $80 on Nov expiration, and good news thereafter....

And to make it more interesting, these UAN units are in my Roth account. I've been trying to get answers from my brokerage about what happens if I turn 59 1/2, and then transfer them out of the Roth into a regular account. The question is whether that transfer will be scored for tax purposes as a sale in the Roth and repurchase at the same price in the regular account (which would trigger UBTI in the Roth), or whether it will be treated as a transfer in kind from the Roth to the regular account (which means no sale in the Roth, and no UBTI triggered by selling units in the Roth). I await their response......

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Elroy who wrote (796)12/21/2023 11:28:43 PM
From: Area51
   of 811
 
Did you ever get an answer to your question (circumvent tax by transferring shares out)? Or did Privately convince you that K-1 capital gains won't be taxed? I like what he says and what he says makes more sense to me than what the accountants did with my form 990-T, but I just pulled out my 990-T for my sale in 2021 and it is clear as day that they taxed the capital gain (they specifically attached a form 8949). You had a good comment (since deleted?), about why wouldn't they tax a capital gain in something like CCL similarly. I guess the only reason they don't is they only review it for companies that file K-1? Still it makes no sense to me. But change what you can control and accept the rest I suppose.

I actually have been buying some UAN lately (got some higher, some near the lows and some today). I think 2024 may see the dividend back near $20 per share, and the unit price back over $100. We shall see.

Best Regards,
A51

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Area51 who wrote (797)12/22/2023 12:13:43 AM
From: Elroy
   of 811
 
I've asked my brokerage what will happen if I remove an MLP from a Roth to a regular account. They say the cost basis of the MLP in the regular account will be the value on withdrawal date, and that the withdrawal itself will not be a taxable event. So I'm going to try to do that next year when I turn 59 1/2.

I don't own any UAN in regular accounts, but will own some when I do this transfer out of my Roth. Lately there has been deal action (Koch bought some OCI fertilizer factories that are similar in propductin volume to to UAN's plants, and the comparitive value implies UAN is worth something like $295 per unit. It doesn't make much sense, but that's what the math says.

I think UAN will pay $10-$15 over the next three distributions, and visibility beyond that is nil. Depends on where fertilizer sales price per ton goes, and so far it seems to not be going up despite heading into the high useage season....

Share RecommendKeepReplyMark as Last ReadRead Replies (1)
Previous 10 Next 10