27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Janney analyst Akil Marsh raised the fair value of Genesis Energy L.P. (NYSE: GEL) unit to $44 from $32 on higher execution confidence. The brokerage kept a rating of Buy on the shares of the company.
The analyst stated Janney has "increased confidence" that Genesis Energy "will execute on its de-risked growth cap ex plan." Furthermore, the analyst believes a lower implied cost of capital exists "as GEL's equity risk premium has continued to contract following the rally in its underlying debt."
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
Marsh elaborated, "With above peer EBITDA growth, 10 percent per annum distribution growth through at least 2018, and a +6 percent yield we find the units compelling. Our Fair Value Estimate of $44 is based on a 12.5x multiple on our 2017 EBITDA estimate, which is a 10 percent discount to GEL's historic multiple."
Related Link: Genesis Energy Increases Credit Facility From $1.5 To $1.7 BillionJanney sees growth capex as driving +15 percent annual EBITDA growth in the next three years. According to the analyst, Genessi Energy is at the tail end of a $900 million capex program, with $270 million slated to be spent this year. The analyst believes that majority of the growth capex spend for 2016 "is tied to midstream projects related to investment-grade rated Exxon Mobil Corporation (NYSE: XOM)'s refinery assets."
The brokerage pointed out another notable growth capex project, the midstream assets in the Powder River Basin, which is supported by an acreage dedication from investment-grade rated Devon Energy Corp (NYSE: DVN).
The analyst concluded, "Because of the robust EBITDA growth, we expect the distribution to be well covered between now and 2018 (+1.2x coverage ratio) while growing 10 percent annually."
At time of writing, Genesis was slightly down at $37.56, shortly before Thursday's opening bell.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.