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re: A List of (Potentially) Good MLPs to Invest In

Posted on 4/18/16 at 1:47 pm to
Posted by LSU0358
Member since Jan 2005
7920 posts
Posted on 4/18/16 at 1:47 pm to
Be very careful with energy sector MLP's right now.

One must really understand the financial position of the company. If the MLP restructures debt, the amount debt is reduced is considered noncash income for unit holders. The noncash income is a taxable event.
Posted by Omada
Member since Jun 2015
695 posts
Posted on 4/18/16 at 1:58 pm to
quote:

One must really understand the financial position of the company. If the MLP restructures debt, the amount debt is reduced is considered noncash income for unit holders.
Correct, which is why the criteria I used is so important. The Piotroski F-Score looks to see if 1) the company is profitable, and 2) operating cash flows exceed net income. If operating cash flows do not exceed net income, that will point out accounting tricks like you mentioned. The only MLP I mentioned with operating cash flows less than net income was GEL, which is a leftover I wouldn't recommend over others.

Good point, though.
This post was edited on 4/18/16 at 1:59 pm
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