Hugoton Announces an Intended Deal
founding general partner of DHULZ has apparently found a younger person he can
trust to use the partnership's assets as part of a base in a larger entity that
will attempt to develop a growing income stream free of UBTI (unrelated business
taxable income). We need to study
the proposed transaction before we draw a firm conclusion.
Nonetheless we can say that DHULZ already enjoys favorable market
recognition with a McDep Ratio of 1.14.
A conservative investor looking for high income might choose to cash in,
pay the tax and invest the proceeds in something like Hugoton Royalty Trust
at a McDep Ratio of 0.78. Yet, an
optimistic investor might look at the favorable recognition enjoyed by the only
other master limited partnership in our coverage, Teppco Partners, at a
McDep Ratio of 1.47 and hope that DHULZ might do particularly well in the
proposed new entity.
For latest estimates see Tables DHULZ-1, DHULZ-2, August 6, 2001; MR Tables: Small Cap Natural Gas Stocks - McDep Ratio, Present Value and Cash Flow.