Price Target Raised for 8% Yielding MLP

by Sam Collins | January 8, 2013 1:35 am

Rentech Nitrogen Partners L.P. (NYSE:RNF[1]) — This master-limited partnership (MLP) is a provider of clean energy solutions and nitrogen fertilizer. Third-quarter 2012 earnings of $0.75 beat consensus estimates of $0.63 per share. Revenues grew by 53% versus estimates of 22%. Growth may slow in Q1 as a result of unscheduled maintenance and acquisitions, but should pick up again in Q2 through Q4.

Its cash available for distribution was cut by $0.03 to $3.37, for an 8% yield. As a publicly traded limited partnership (PTP), Rentech is expected to continue to receive favorable tax treatment. (See the NAPTP website[2] for information on PTPs, current thinking on their tax treatment, and answers to just about every question you may have about them.)

The Trade of the Day[3] first commented on RNF on Nov. 30, when it was trading at $39.55. On Monday, the stock broke from a consolidation (triangle) that formed following a run from $22 to over $39 despite the minor revision in its cash distribution. The breakout should add another leg to its bull market and the near-term trading objective is raised from $44 to $46. And long-term investors could receive a much higher return.

Trade of the Day - Rentech Nitrogen Partners L.P. (NYSE:RNF)
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