Why Niska Gas Storage Partners' Shares Jumped Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Niska Gas Storage Partners (NYSE: NKA  ) jumped 13% today after the company completed a restructuring.

So what: The company converted subordinate units and distribution rights into new incentive distribution rights. The company couldn't increase its distribution to common unitholders without paying minimum distributions owed to these unitholders, which would have been about $12 million per quarter, and they would take a high percentage of added payouts.  

Now what: This reduces the risk Niska will have to reduce its distribution to pay back these incentive distribution rights holders and gives upside potential for investors. Both Goldman Sachs and Stifel Nicolaus liked the move because they upgraded the stock. The new structure gives common unit holders more upside, which should boost the stock long-term if fundamentals improve.

Interested in more info on Niska Gas Storage Partners? Add it to your watchlist by clicking here.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2345065, ~/Articles/ArticleHandler.aspx, 12/19/2014 10:09:22 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement