StoneMor Partners L.P. (NYSE:STON)

CAPS Rating: 3 out of 5

The Company is an owner and operator of cemeteries in the United States.

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Member Avatar TMFbuild (50.68) Submitted: 10/14/2014 12:45:58 PM : Outperform Start Price: $23.92 STON Score: +0.92

-StoneMor is the second-largest cemetery owner/operator in the U.S., and it's been growing its market share in this fragmented industry
-It owns nearly 278 cemeteries in 28 states and Peurto Rico— with enough space, on average, to accommodate new clients for more than 240 years — along with 90 funeral homes
-Stable and predictable business
-9.9% dividend yield =: superior to 2013 year end MLP average of 5.8%
-Favorable demographics trend
-High barriers to entry
o   Scarcity and cost of real estate nearly densely populated area
o   Initial capital requirement and administratively complex business for new entrants
o   Deferred revenue accounting makes cemetery business unattractive to “C-corps”
-Target market more resilient to market downturn – low unemployment risk, mortgage almost paid off, no children liability
-Located in areas where there is almost no competition from big players
-Their pre-need sales program stands out as local competitors have either no such offering or the services are yet not as developed as Stonemor’s

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Member Avatar moonlightsail (< 20) Submitted: 8/25/2014 9:05:37 PM : Outperform Start Price: $25.11 STON Score: +1.85

Growing company operating cemetaries with 9% dividend.

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Member Avatar Steve2753 (< 20) Submitted: 5/23/2014 5:44:02 AM : Outperform Start Price: $23.14 STON Score: +5.08

Consolidation in the funeral/home, (Death Care) business

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Member Avatar AlexeiVronsky (97.67) Submitted: 2/14/2014 2:40:57 AM : Outperform Start Price: $22.56 STON Score: +0.76

Sold puts on this one, rather than buying.

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Member Avatar bbmaven (100.00) Submitted: 11/22/2013 2:23:34 PM : Outperform Start Price: $20.79 STON Score: -39.82

About a year ago, I started thinking about the advantages of just selling puts rather than owning the stock. The downside of just selling puts rather than owning the stock (in most dividend stocks) is that you give up the upside of the stock and do not receive the distributions. The put premium usually includes consideration of distributions, so that is not that big a deal as long as you factor that in. I do not see the stock price of STON taking off - perhaps ever - because of the confusion about GAAP accounting. As long as they continue growing, it will appear that they are losing money and funding distributions with either borrowed money or dilution. Because of this perception, STON shares are very expensive to borrow for shorting, pushing STON bears who want to play the downside into buying puts. Thus, put premiums are almost ALWAYS out of balance with call premiums and reflect a really high volatility.

I have concluded from all of this that, until something changes in perception of STON that consistently selling puts provides significantly more return than owning the stock. I have the same (or a little less) of the downside risk of the stock going down, do not foresee missing out on upside, and get yield that dwarfs the 9-10% distributions. In the past year alone, the put strategy has returned close to 25% - it could yield more but I am doing this in an IRA and all puts are cash secured and only for the number of shares that I owned before. DO NOT OVERALLOCATE - this is not "free" money. But as I am willing to own shares in STON for the long term and one believes the stock is not going to take off, the strategy will operate in exactly the same manner as owning STON with about 2.5 times the return.

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Member Avatar brett4ve (39.77) Submitted: 8/12/2013 11:34:25 AM : Outperform Start Price: $19.30 STON Score: +14.55

Undervalued and misunderstood.

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Member Avatar sunyem59 (< 20) Submitted: 2/22/2013 1:05:55 PM : Underperform Start Price: $22.20 STON Score: +17.73

I bought STON a few years back for the big dividend and because I thought it would be stable no matter what the economy was doing. Benn seriously disappointed with their performance supposed shaky financials.

Recently sold half my shares (of course it went up some afterward) and will sell my other half to free up cash for something better.

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Member Avatar randomvariable (72.56) Submitted: 2/5/2013 2:19:47 PM : Outperform Start Price: $21.51 STON Score: -14.06

following the crowd, and at a higher cost than I'd like, but the dividend could be nice.

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Member Avatar divedendPete (< 20) Submitted: 12/21/2012 10:16:40 AM : Outperform Start Price: $18.25 STON Score: -0.01

longterm

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Member Avatar Ken1171 (24.79) Submitted: 12/17/2012 5:36:41 PM : Outperform Start Price: $17.95 STON Score: +3.43

We all will require their service.

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Member Avatar badducky (58.90) Submitted: 11/21/2012 7:02:09 PM : Outperform Start Price: $18.20 STON Score: -2.64

I'm actually less bullish about this company than others in the same industry, but with the rising tide of baby boomers about to start their final journey, it shouldn't be difficult for a reasonably-good management team to generate a great run in the next few decades. My only fear is the potential for monkey business with pre-need plans.

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Member Avatar docjohnson08 (< 20) Submitted: 11/21/2012 3:14:08 PM : Outperform Start Price: $18.24 STON Score: -3.53

Do the right research, don't just look at the surface numbers. Misunderstood stock. These guys have more than enough money to pay off their huge dividend.

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Member Avatar zoombag (< 20) Submitted: 10/3/2012 7:52:42 AM : Outperform Start Price: $19.07 STON Score: -4.33

Nice dividends from this cemetery and funeral home conglomerate.

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Member Avatar StarWitchDoctor (99.41) Submitted: 7/31/2012 5:08:11 PM : Outperform Start Price: $18.42 STON Score: -19.76

a pro-fessional selection and real money holding.
There are alot of bears trying to tread on this one.

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Member Avatar SamsaricSufferer (< 20) Submitted: 7/28/2012 9:28:06 PM : Outperform Start Price: $19.00 STON Score: -10.43

Currently oversold due to concerted short campaign on Seeking Alpha.

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Member Avatar sk8terman (< 20) Submitted: 4/3/2012 10:51:46 AM : Outperform Start Price: $18.72 STON Score: -4.93

Recession proof, high yield and great revenue growth.

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Member Avatar CatFoodMoney (72.96) Submitted: 2/24/2012 10:01:38 AM : Outperform Start Price: $19.21 STON Score: -13.57

Unfortunately, people just keep on dying.

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Member Avatar TomFoolNC (29.04) Submitted: 1/18/2012 1:00:27 PM : Outperform Start Price: $19.21 STON Score: -21.31

solid balance sheet (though confusing), dividend

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Member Avatar vinisin (< 20) Submitted: 1/8/2012 10:25:15 PM : Underperform Start Price: $18.39 STON Score: +18.11

The cost argument may or may not be correct, but the continuous stock price cannot be ignored.

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Member Avatar gameguru (31.63) Submitted: 1/5/2012 2:22:09 PM : Outperform Start Price: $17.47 STON Score: -10.55

Misunderstood stock that is beat up from S&P debt downgrade and short speculation. Now yielding 10+% with potential capital appreciation. MLP structure.

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