Those of you who are clients of Sprott know that for years we have liked real asset income opportunities. These are boring businesses, pipelines, ports, terminals. This sector has become extremely popular, particularly in the United States, as Master Limited Partnerships (MLPs). The beauty of the MLP structure is that, provided that these companies distribute their free cash, which I think is a nice thing for them to do anyway, there’s no tax at the corporate level.
The reason that I bring this sector up now, despite the fact that it has been very popular, is that about once in a decade, these companies have the opportunity to grow.
…most of the assets that populate these Master Limited Partnerships are in some way, shape or form related to the oil and gas industry.
…to the extent that the current prices that we’re seeing in the energy business continue through the third quarter of 2015, I think that you’ll have a once-in-a-decade opportunity that will last for probably two years to purchase these Master Limited Partnership shares and enjoy both yield and growth.
Rick expects massive opportunities in oil and gas MLPs later this year, due to what he predicts will be a huge asset sell-off by distressed oil and gas companies. Do you have experience investing in a Master Limited Partnership?