Moveable Pipeline- Companies Revealed!

By | November 19, 2013

What the heck is a ‘Movable Pipeline’ that might bring you prosperity by investing in its stocks?

The $5.8 Billion Reason the U.S. Government May Never Approve Another Pipeline…So much American oil is flowing out of the ground there aren’t enough pipelines to move it all.

That’s how Bret Owen’s teaser ad gets you interested by its opening spiel. Thinly veiled and quite interesting teaser ad inundating from the Contrarian Profits Newsletter. I am sure you are fascinated and you want to know more.

Let us look at the tease hook closely a ‘Movable Pipeline’! Without the gibberish why else would you be interested in reading a sales pitch.

Bits of quotes from his ad.

“Moveable pipelines” aren’t new, actually. The science has been around for years. The oil companies tried it out here and there, on a small scale.

What are those Movable Pipelines?

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Quite obviously he is referring to rail cars and tanker vans that move oil and gas. So the story of rail cars and rails concerning the new American Oil finds flowing out of North Dakota from the Baken Shale has become quite phenomenal now.

And more importantly that is the reason why Warren Buffet’s interest back in 2009 in BNSF was all about. And the premium priced investment he made in Burlington Northern Santa Fe railroad which turned out pretty well for the Oracle of Omaha. Quickly followed with quite a few instances, from the newsletter vendors peddling these same types of investments.

The one we saw last time was from John Mauldin pitching his ‘Fiscal Cliff Winners’, where he was pushing the American Railcar Industries (ARII), that had a nice run owing to the attention, the sector had met by  Warren Buffet’s interest in rail cars back in 2009.

So what is the $5.8 Billion worth Reason? Is it really worth for you to get invested in the play that Bret Owens is touting in his teaser ad? Let’s find out. Shall we? Some more quotes please…

Fed up, Big Oil is increasingly turning to a new, more lucrative way to ship oil. It’s five times faster than a pipeline, it takes days, not years, to set up – and it doesn’t need special approval.

Well, that’s the musing that sets just the right mood for a bout of Movable Pipelines! And these are quite obviously railways, and its connected businesses that Bret Owens is pitching for his Contrarian Advantage subscribers. He is trying to convince us that the idea is similar to Warren Buffet’s idea, let’s analyze.
Some more quotes from his ad raving.

There’s one company I’m particularly excited about. Enbridge’s $2.5 billion Sandpiper pipeline, designed to move more crude out of the Bakken, has met with difficulties. “If you’re sitting in the Bakken, you don’t have an alternative. There’s no pipeline to the east or west,”

This isn’t true however Warren Buffet had bought the railways and Bret Owens is trying to push its ancillaries. From what I understand the sales push is not a clean play on railcars or tanker cars. Bit of research on this exposed Trinity Industries, Inc. (TRN) as the stock Owens is touting.

There’s a great debate, whether train transport is cheaper than pipelines on an operating basis, for Moving American Oil and gas. But, the instance of Keystone XL pipeline mired with political controversies — I expect things to continue as we see more oil and gas gushing out of American soil, which will force energy producers to look for alternatives given the proximity of transporting U.S. crude.

There’s another argument that says rail is more flexible, which is very important as shale outputs tend to drop off quickly leaving the pipeline installations to wither. And also the U.S. railroad system is far more expansive and less subject to political and regulatory battles that can confine pipelines.

Guess! Who according to Bret Owns is a Movable Pipline Company?

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Oil producers are predisposed to the flexibility offered by rail. This has led me to consider ‘Flexible’ Rail Bests Pipelines (or Movable Pipelines to be precise) and because all of the direct plays on rail-car manufacturing are trading at pretty low valuations mostly in the 10-12 PE neighborhood.

My favorite Moveable Pipeline- Companies for a keen investor are:

  1. American Railcar (ARII) controlled by Carl Icahn
  2. Greenbrier (GBX)
  3. Berkshire Hathaway (BRK-B)
  4. Trinity (TRN) indeed reported a $5.1 billion backlog.

Disclosure: I don’t have any positions in any stocks mentioned herein, and no plans to initiate any in the near future as well.

But do your own researches on these plays before you get in.

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One thought on “Moveable Pipeline- Companies Revealed!

  1. Tri Harta

    Moveable pipelines may consist of railways, or in some maritime area like Indonesia, tanker ships. Greece is known with the great fleet of tankers, but many of them are not operated due to high operational cost.

    Reply

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