Stock Reveal: Charles Mizrahi’s “MLP Checks”

Welcome back to the channel that steals stock picks from stock picking experts and gives them away for free.

Today we're going to be looking at Charles Mizrahi's stock teaser where he hypes an investment that could get you MLP Checks.

Of course Charles wants you to pay him to learn what he means by this but I have you covered.

Charles left enough clues in the presentation to figure out the stock he's talking about and I'll reveal it in the video below:

On top of that I'll tell you whether this is a worthwhile investment.

Let's get started now! 

Transcript Of Video

What Are MLP's?

This entire presentation has to do with MLP's which stands for master limited partnership.

A master limited partnership is a publicly traded partnership that combines the tax benefits of a partnership with the liquidity of a publicly traded company. MLPs are required to generate at least 90% of their revenue from a single industry, typically energy or energy infrastructure.

MLPs offer several advantages to investors. 

MLPs are pass-through entities, which means that their income is not subject to corporate taxation. Instead, the income is passed through to the investors, who are responsible for paying taxes on it at their individual income tax rates. This can be a significant advantage for investors in high tax brackets.

Additionally, MLPs typically pay out a high percentage of their income to investors in the form of distributions. These distributions can be significantly higher than the dividends paid by stocks or the interest paid by bonds.

Also, MLPs are traded on national exchanges, which makes them relatively liquid investments. This means that investors can easily buy and sell MLPs without having to worry about illiquidity.

However, MLPs also have some risks.

MLPs are concentrated in a few industries, such as energy and energy infrastructure. This makes them vulnerable to changes in the underlying industries.

Additionally, MLPs can be more volatile than stocks and bonds. This is due to their focus on a single industry and their pass-through tax structure.

Also, MLPs can be complex investments. Investors need to understand the tax implications of investing in MLPs and the risks associated with the underlying industries.

Overall, MLPs can be a good investment for investors who are looking for high yields and tax benefits. However, investors should carefully consider the risks before investing in MLPs.

MLP #1: Enterprise Products Partners

In this teaser there's three MPL investments hinted at and I was able to figure out two of them.

The first is Enterprise Products Partners.

Enterprise Products Partners is a publicly traded partnership that operates in the midstream sector of the North American energy market. This means that it owns and operates pipelines, storage, transportation, and processing assets that help move oil and natural gas from the production level to the refinement level. It is one of the largest and most diversified midstream companies in North America, serving both domestic and international markets.

Some of the pros of investing in this company are:

- It offers a generous distribution yield of 7.3%, which is backed by more than two decades of annual increases. The distribution is also well covered by distributable cash flow, which indicates a high level of safety and reliability⁷.
- They have a conservative and resilient business model, as most of its revenues come from fees for the use of its assets, rather than from the volatility of commodity prices. It also has a diverse and integrated asset mix, which provides multiple sources of income and reduces exposure to any single market segment.
- Additionally, it has a sound financial core, with a strong balance sheet, low leverage, ample liquidity, and investment-grade credit ratings⁷. It also has a proven track record of growth, both organically and through acquisitions.

Some of the cons of investing in this company are:

- It faces regulatory and environmental risks, as pipelines are subject to strict oversight and compliance requirements, as well as potential opposition from activists and communities. Any delays or denials of permits, or any incidents or accidents involving its assets, could have a negative impact on its operations and reputation.
- It operates in a highly competitive and capital-intensive industry, which requires constant investment to maintain and expand its infrastructure network. It also faces competition from alternative energy sources, such as renewables, which could reduce the demand for its services in the long term.
- They have a complex tax structure, as it is structured as a master limited partnership, which means that it does not pay corporate taxes, but passes through its income and losses to its shareholders. This could result in higher tax liabilities for shareholders, depending on their individual tax situations. It also makes it more difficult to compare its financial performance with other companies.

MLP #2: Energy Transfer LP

The next stock Charles is teasing is Energy Transfer LP.

Energy Transfer LP is another publicly traded partnership that operates in the midstream sector of the North American energy market, similar to Enterprise Products Partners. It owns and operates a large and diverse portfolio of pipelines, storage, transportation, and processing assets that help move oil, natural gas, and natural gas liquids from the production level to the refinement level. It is one of the biggest and most integrated midstream companies in North America, serving both domestic and international markets.

Some of the pros of investing in this company are:

- It offers a high distribution yield of 9.7%, which is supported by more than 20 years of annual increases. The distribution is also well covered by distributable cash flow, which indicates a high level of safety and reliability.
- They have a strong and resilient business model, as most of its revenues come from fees for the use of its assets, rather than from the volatility of commodity prices. It also has a diverse and integrated asset mix, which provides multiple sources of income and reduces exposure to any single market segment.
- Additionally, they have a solid financial core, with a healthy balance sheet, moderate leverage, ample liquidity, and investment-grade credit ratings. It also has a proven track record of growth, both organically and through acquisitions.

Some of the cons of investing in this company are:

- It faces regulatory and environmental risks, as pipelines are subject to strict oversight and compliance requirements, as well as potential opposition from activists and communities. Any delays or denials of permits, or any incidents or accidents involving its assets, could have a negative impact on its operations and reputation.
- Also, they operate in a highly competitive and capital-intensive industry, which requires constant investment to maintain and expand its infrastructure network. It also faces competition from alternative energy sources, such as renewables, which could reduce the demand for its services in the long term.
- Lastly, it has a complex tax structure, as it is structured as a master limited partnership, which means that it does not pay corporate taxes, but passes through its income and losses to its shareholders. This could result in higher tax liabilities for shareholders, depending on their individual tax situations. It also makes it more difficult to compare its financial performance with other companies.