Maybe the nicest thing I can say about Natural Resources Partners LP (NYSE:NRP) since the last time I wrote on this partnership is that it hasn't done as badly as other companies with substantial Appalachian coal assets like Arch Coal (NYSE:ACI) or Alpha Natural Resources (NYSE:ANR).
An unexpected distribution cut took a lot out of the units in
mid-January and the market seems relatively disinclined to put much
value on the partnership's efforts to diversify away from coal.
I
think that's a mistake; the company's heavy reliance on App coal is a
risk, but a known risk. At the same time, the company is reducing
leverage and has made good strides in adding quality assets like its
stake in OCI Wyoming LP (where OCI Resources LP (NYSE:OCIR)
owns the controlling interest) and ownership interests in aggregates
and oil/gas acreage. The long-term outlook for Appalachian coal is
pretty dismal right now, but any upside at all would be in NRP's favor
and I believe there are still some credible reasons for holding these
units.
Read more here:
Weak Coal Only Part Of The Natural Resource Partners Story
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