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Price Target Raised for 8% Yielding MLP

Rentech Nitrogen Partners broke from a consolidation and could add another leg to its bull market


Rentech Nitrogen Partners L.P. (NYSE:RNF) — 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 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 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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