Last fall I said that Ferrellgas Partners (NYSE:FGP) put in a performance that was simply disgusting and the stock proceeded to fall to the $5 range. Unit prices have absolutely imploded since the major distribution cut early last year. Low energy prices have hurt revenues and earnings. We have seen other partnerships cut their distributions or eliminate them altogether. Although FGP has had a long proud history of its stable distribution, it too was cut. Now the question becomes whether or not this new level of payout ($0.10) is sustainable. The prices of each unit had begun to rebound this winter, but look set to fall back heavily on the back of another round of unexpectedly weak performance. While propane trades as its own commodity, it is correlated to oil and natural gas, which have been on divergent paths lately. As you know oil has been getting crushed. At the same time, natural gas has been strong in recent weeks. Propane however continues to meander.
In its most recent quarter, operations did swing to positive income. This is because the quarter contains some of the coldest months of the year, when propane and other energy sources are in high demand. That said, the company faced pressure as the winter was relatively mild compared to past years. While colder than last year, it was..……………………READ MORE