Income strategy weekly update – miller value partners electricity prices going up


Equities and a preferred comprised last week’s top five contributors (Exhibit 2). Guggenheim added NGL Energy Partners (NGL) to its Best Ideas List and initiated the stock with a “Buy” rating and $16 price target, 62% implied upside excluding the 15.8% dividend yield. gas density conversion The analyst believes NGL’s water services EBITDA will expand at a compounded annual growth rate of 52% over the next three years, leading to a re-rating of the shares. Sandler O’Neil upgraded Investment Bank Greenhill (GHL) from “Hold” to “Buy” with a $28 price target, 12% upside from current levels. The analyst cited recent insider purchases by CEO Scott Bok, reduced leverage, and believes the company’s expanded sector coverage (Mining & Insurance) will drive gains in advisory fee market share. TriplePoint Venture Growth (TPCG) rose above its 200-day moving average after announcing that its Board declared a special distribution of $0.10/share (Trailing Twelve Month yield of 12.7%). gas finder Preferred shares of Travel Centers of America (TA) rose on news of the completion of its previously announced sale of 225 convenience stores, one restaurant, and five land parcels for net proceeds of $321.4M, which will be used to address the company’s leverage and core growth initiatives. Credit Suisse reiterated their “Outperform” rating on Two Harbors Investment Corp (TWO), citing expectations for more attractive risk-adjusted returns following the soon-to-be completed portfolio transition from the CYS acquisition.

Equities comprised all of last week’s top five detractors (Exhibit 3). Alternative asset managers Apollo Global (APO), Blackstone (BX), and Carlyle Group (CG) declined with the broad equity market and as Morgan Stanley reiterated their outlook for the group. The analyst cited that while the names look cheap, they may lack catalysts and face headwinds on a choppy backdrop for risk assets, which could cause near-term monetization issues. Goldman Sachs, however, remains bullish with “Buy” ratings on Apollo and Blackstone with 70% and 40% upside to their $44 and $42 price targets, respectively, while maintaining a “Neutral” rating on Carlyle with a $26 price target, 51% implied upside. electricity and circuits test Tupperware (TUP) fell below its 50-day moving average. CenturyLink (CTL) fell as JP Morgan removed the stock from their U.S. Analyst Focus List, but did note they view the shares as attractive for income-oriented investors, yielding 12.7% with limited risk to the dividend. The analyst maintained an “Overweight” rating and $27 price target, 59% implied upside.

1The performance figures reflect the results of a representative account net of management fee and certain other expenses. For important additional information about Income Strategy performance, please click on the Income Strategy Composite Performance Disclosure. gas pain in chest The performance returns shown in this report are preliminary and are subject to revision. Past performance is no guarantee of future results.

Significant Contributors and Significant Detractors are the Strategy holdings that had the greatest effect on Strategy performance for the week. gas natural Holdings that have been in the Strategy since the end of the most recent calendar quarter are identified by name. For information on how Contributor/Detractor data were calculated and a list showing the contribution to the Strategy’s weekly performance of each investment held at such quarter end, contact us.

Any views expressed are subject to change at any time, and Miller Value Partners disclaims any responsibility to update such views. The information presented should not be considered a recommendation to purchase or sell any security and should not be relied upon as investment advice. It should not be assumed that any purchase or sale decisions will be profitable or will equal the performance of any security mentioned. Past performance is no guarantee of future results, and there is no guarantee dividends will be paid or continued. Content may not be reprinted, republished or used in any manner without written consent from Miller Value Partners.