As we sent out to Activist Strategy subs last week, activism in coal is heating up. Specifically, there are management teams that have lacked "any real strategic or capital actions" - the key reason for poor stock underperformance.
Part of the fix is boosting the utilization of MLPs, including the dropdowns of assets to MLPs. Trying to grow via M&A isn't working, it's time to focus on dividends. Management teams have a lack of ability to create shareholder value and falling commodity prices won't recover anytime soon.
We need to break the negative feedback for MLP dropdowns - delays in dropdowns reinforce this, where a falling stock price makes dropdowns harder and drives the stock further down.
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