USDP - USD Partners LP

[antao]

Anyone looking at USDP?

 

They acquire, develop and operate energy-related logistics assets (rail terminals and other midstream infrastructures). They IPOed in Oct. 14 and TTM top line growth and ROE are just shy of 50%.

 

High debt load may be a problem - although EBITDA covers interests 7.5x and 90%+ of their cash is generated by multi-year take-or-pay contracts - specially considering they are actively looking for opportunities to acquire assets in the space (CEO stated in Aug that they were in the second round on a couple of different acquisition opportunities). So further growth is to be expected.

 

CEO Dan Borgen has been around since the 90's and seems to know what he is doing (check out earning calls and this piece by reuters http://www.reuters.com/article/us-usd-borgan-idUSBRE97J02R20130820)

 

In 2013 they started to steer away from the shale space in the US and focusing on the canadian oil sands. As part of this strategy, they acquired the Casper terminal 1y ago, which will benefit from the expansion of the express pipeline.

 

Since the IPO insiders have been actively buying the stock (no sellers). CEO almost 1M$ worth of stock. Distribution yield is currently 9%

 

Any thoughts?