Tesoro Logistics (NYSE:TLLP)

CAPS Rating: 3 out of 5


Player Avatar TMFDeej (99.26) Submitted: 4/25/2011 4:14:48 PM : Outperform Start Price: $21.74 TLLP Score: +136.36

I'm normally not one to like IPOs, but when the IPO is in a spin-off I pay attention. For the first time in a long while I tried to get in on an IPO a couple of weeks ago, CVR's spin-off of its nitrogen fertilizer operations (UAN). Darn you Charles Schwab for not giving me shares for some reason. Perhaps I was too late when I realized that it was actually offering them. What's not to like about a spun-off, nitrogen fertilizer producer that plans to pay a massive dividend in an era of high food prices?Here's another interesting one, Tesoro is spinning off Tesoro Logistics in an IPO this week under the symbol TLLP. The new company plans to to "own, operate, develop and buy various assets involved in distribution, transportation and storage of crude oil and refined products." In short it's a pipeline operator, a sector which I like. Scheduled to begin with a quarterly pay-out of $0.3375/share, TLLP will have an initial yield of just under 6.5% at its IPO price of $21.One thing that is a little scary about TLLP is that initially 96% of its business will come from its former parent company.I haven't done nearly as much research on TLLP as I did on UAN (a lot good that did me other than earn me 15 CAPS points ;) ), but at first glance it looks interesting.Deej

Featured Broker Partners