Investment idea generation.


Our thoughts.

Activists cooking up coal?

As we sent out to Activist Strategy subs last week, activism in coal is heating up. Specifically, there are management teams that have lacked "any real strategic or capital actions" - the key reason for poor stock underperformance.

Part of the fix is boosting the utilization of MLPs, including the dropdowns of assets to MLPs. Trying to grow via M&A isn't working, it's time to focus on dividends. Management teams have a lack of ability to create shareholder value and falling commodity prices won't recover anytime soon.

We need to break the negative feedback for MLP dropdowns - delays in dropdowns reinforce this, where a falling stock price makes dropdowns harder and drives the stock further down.

Sign up for Activist Strategy to read the full piece. 2-week free trial available (no CC needed)