StoneMor Partners L.P. (NYSE:STON)

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.

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

longterm

We all will require their service.

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.

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.

Nice dividends from this cemetery and funeral home conglomerate.

I used to be long this stock, and have turned and given it the red thumb.

I know people say that the P&L is misleading, because STON takes in cash that they don't get to realize as income right away. But even so, the cash should show up on the cash flow statement, right? Except, when you look at their financials, their operating cash flow doesn't cover the distribution -- not by a long shot ($104M in distributions from 2008-2011, but only about $23M in operating cash flow). Both the distribution and the acquisitions have been supported by equity raises ($164M over the same period), and to a lesser extent by issuance of new debt (about $27M of net new debt, again over the same three years).

It's just hard for me to see how this ends well for unit holders. Am I missing something?

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

Currently oversold due to concerted short campaign on Seeking Alpha.

I want to watch this one, added it simply to keep tabs on it.

Strong business in a "growing market" with good dividend.

Recession proof, high yield and great revenue growth.

Unfortunately, people just keep on dying.

solid balance sheet (though confusing), dividend

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

This is a much-misunderstood stock and that certainly has a negative impact on the valuation. There is an excellent article in Forbes which explains some of the complexities, here are some quotations:

"Kate Stalter: Tell us about a few of these equities that you are putting your clients into, Paul.

Paul Maher: I want to disclose that I am long these positions on behalf of my clients, and the other is I’m not making a recommendation to anybody else.

I have a lot of favor in a position called Stonemar Partners (STON). It is a recession-proof industry. It is in the mortuary and cemetery business. They are again a limited partnership.

They have an awkward relationship with the IRS. The rules for the IRS make their fundamentals—if you’re not looking them as a partnership, limited partnership with a distribution characteristic, it’s hard to read that this company can afford to pay its dividend.

But when you do the proper research, you find out that this position has a great deal of assets that can’t get shown, because they have to wait at least a year for a certain percentage of them to be allowed on the books, even though they’ve already collected the money. And then they have to wait until the product is used when the client dies, or when they make up a selection for a specific whatever.

Kate Stalter: Interesting business model.

Paul Maher: Yeah, it very much is. The nature of their business allows them to leverage against assets that can’t be shown on their 10Ks and their 10Qs, because IRS rules don’t allow it.

They are growing so fast that it looks like they’re outreaching sort of their logistical line. Their ability to supply their growth is accomplished on the debt side, but it’s very carefully collateralized against assets that aren’t allowed yet to be shown as assets.

A limited partnership that’s not growing…this process would catch up with itself, and it would look OK on the books. But when a company like this particular company, Stonemar, grows as fast as it does, it’s harder to see it. It’s a bit underappreciated.

It goes through a little more volatility than I tend to like, but I’m there for my clients to earn a distribution, and that’s what we’re doing."

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

buy the dip, baboon strategy.