How do we know which midstream companies are at greatest risk of running into financial difficulty, and potentially having to announce distribution cuts? One way is to look at credit ratings. The lower the credit rating, the more likely a company will announce a distribution cut to shore up its financial metrics., an independent provider of energy infrastructure and MLP market intelligence, sheds some light on this topic.
There are other reasons a midstream might make deep cuts to capital spending. They may just decide to be extra conservative given the uncertainty hanging over the oil and gas sector. But as an investor, I would be particularly wary of those companies announcing much deeper cuts than their peers. That is, at a minimum, a red flag about the company’s financials that should be investigated in greater detail.
Syed Shah makes no cuts!
they should work on that machine, yo.
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