Surprisingly, These MLPs Still Have Hidden Upside

Both BreitBurn Energy Partners and Vanguard Energy Partners have surprisingly hidden upside to the Permian Basin.

Jul 11, 2014 at 11:15AM

Texas' Permian Basin is quickly becoming one of the hottest oil plays in America. Its potential fueled 140% gains in the past year for investors in Diamondback Energy (NASDAQ:FANG), which is solely focused on the Basin.

FANG Chart

FANG data by YCharts

Those same gains, however, have surprisingly eluded MLPs like BreitBurn Energy Partners (NASDAQ:BBEP) and Vanguard Natural Resources (NASDAQ:VNR). Because of that, both MLPs still have hidden upside to the basin.

One key difference here, and the reason why the value is hidden, is that neither BreitBurn Energy Partners nor Vanguard Natural Resources are likely to join Diamondback Energy in fully developing the horizontal sections of the basin. Instead, these two are likely to follow the lead of another MLP and monetize these high decline horizontal positions. This will not only enable both to realize some of the hidden value of these assets, but at the same time will add in some low-decline properties that help to grow distributions.

I created the following slideshow to help investors better understand the assets BreitBurn Energy Partners and Vanguard Natural Resources have hidden in the Permian Basin. The presentation details how these assets are turning a company like Diamondback Energy into a growth story, but why these aren't the best assets to be owned by MLPs like both BreitBurn Energy Partners and Vanguard Natural Resources.

Do you know this energy tax "loophole"?
MLPs like BreitBurn Energy Partners and Vanguard Natural Resources put more money in your pocket each month thanks to a tax "loophole". Its a loophole that could make you even more money if you know the right way to play it. You can take full advantage of this profitable opportunity by grabbing our brand-new special report, "The IRS Is Daring You to Make This Investment Now!," and you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.

Matt DiLallo owns shares of Linn Energy, LLC. The Motley Fool recommends BreitBurn Energy Partners. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

Something big just happened

I don't know about you, but I always pay attention when one of the best growth investors in the world gives me a stock tip. Motley Fool co-founder David Gardner (whose growth-stock newsletter was rated #1 in the world by The Wall Street Journal)* and his brother, Motley Fool CEO Tom Gardner, just revealed two brand new stock recommendations moments ago. Together, they've tripled the stock market's return over 12+ years. And while timing isn't everything, the history of Tom and David's stock picks shows that it pays to get in early on their ideas.

Click here to be among the first people to hear about David and Tom's newest stock recommendations.

*"Look Who's on Top Now" appeared in The Wall Street Journal which references Hulbert's rankings of the best performing stock picking newsletters over a 5-year period from 2008-2013.

Compare Brokers