I put OMP and OAS on my watch list after I started reading your articles. I must say that I am very much puzzled on why OMP and OAS are so strong. If you compare OMP with other midstream companies, its revenue and distribution is nothing special. It's a good company but so is SHLX or MMP. I really don't understand why both companies have been running up like crazy.
OAS owning a big chunk of OMP can't be the only reason why people are buying. It's not possible for OAS to sell its stake in OMP without tanking OMP's price.
I'm not chasing it though. I think I missed the boat already on it.
Hi David, for OMP I think the big fear last year was that Bakken would collapse but clearly that's not been happening so it has done better than more diversified midstream players. That's my guess.
For OAS as I state at end of article IMO it's still undervalued but no longer a slam dunk. So would make sense to look elsewhere if you're initiating a new position. No need to chase as you stated.
Hey @hiddenrockcap! Loved the article. I'm curious how you go about finding interesting 'perfect storm' opportunities to look into? For instance - how did you hear about Oasis/realize you needed to dig into it? I assume post-bankruptcy is not heavily covered in the news....
Hi Nikhil, there's a bunch of resources I use. For Oasis I had identified oil as the most compelling sector last year based on cyclical tailwinds. Oasis came up in Kuppy's Event Driven Monitor (https://kedm.com/) as a post-BK emergence. I then read their investment presentations to independently come to my conclusion that it was wildly undervalued stripping out OMP shares. So this was one example but it's mostly putting together a mosaic of different resources to create your investment thesis.
Thanks for the quick answer! Keep it up - I've really enjoyed your work.
I'm mostly in Ethereum, but I'm assuming you're not a crypto guy, so an idea you might find interesting is $ASPS.
Quick pitch: They are set up to profit on housing foreclosures, but have been bleeding because of the eviction moratorium. As a result they're priced as if they're about to go bankrupt, but I expect them to turn around soon when the eviction moratorium officially ends and we get "normal" housing cycle levels of foreclosures. Worth checking out!
Have heard about ASPS from Calvin Froedge on FinTwit. Think it's interesting for sure, the trick is to not get sliced by a falling knife. May initiate a tracker position while waiting for the inflection point.
I put OMP and OAS on my watch list after I started reading your articles. I must say that I am very much puzzled on why OMP and OAS are so strong. If you compare OMP with other midstream companies, its revenue and distribution is nothing special. It's a good company but so is SHLX or MMP. I really don't understand why both companies have been running up like crazy.
OAS owning a big chunk of OMP can't be the only reason why people are buying. It's not possible for OAS to sell its stake in OMP without tanking OMP's price.
I'm not chasing it though. I think I missed the boat already on it.
Hi David, for OMP I think the big fear last year was that Bakken would collapse but clearly that's not been happening so it has done better than more diversified midstream players. That's my guess.
For OAS as I state at end of article IMO it's still undervalued but no longer a slam dunk. So would make sense to look elsewhere if you're initiating a new position. No need to chase as you stated.
Hey @hiddenrockcap! Loved the article. I'm curious how you go about finding interesting 'perfect storm' opportunities to look into? For instance - how did you hear about Oasis/realize you needed to dig into it? I assume post-bankruptcy is not heavily covered in the news....
Would love to hear about your process! Thanks!
Hi Nikhil, there's a bunch of resources I use. For Oasis I had identified oil as the most compelling sector last year based on cyclical tailwinds. Oasis came up in Kuppy's Event Driven Monitor (https://kedm.com/) as a post-BK emergence. I then read their investment presentations to independently come to my conclusion that it was wildly undervalued stripping out OMP shares. So this was one example but it's mostly putting together a mosaic of different resources to create your investment thesis.
Thanks for the quick answer! Keep it up - I've really enjoyed your work.
I'm mostly in Ethereum, but I'm assuming you're not a crypto guy, so an idea you might find interesting is $ASPS.
Quick pitch: They are set up to profit on housing foreclosures, but have been bleeding because of the eviction moratorium. As a result they're priced as if they're about to go bankrupt, but I expect them to turn around soon when the eviction moratorium officially ends and we get "normal" housing cycle levels of foreclosures. Worth checking out!
Have heard about ASPS from Calvin Froedge on FinTwit. Think it's interesting for sure, the trick is to not get sliced by a falling knife. May initiate a tracker position while waiting for the inflection point.