UBS on NuStar (NU) (NSH): Asphalt Business Weighing on Shares

UBS on NuStar (NYSE: NU) (NYSE: NSH): Waiting on a Turn by Ronald J. Barone.

Barone said, "NuStar Energy LP (NS) owns and operates crude oil and refined product pipelines, refined product terminals, and refinery feedstock storage assets primarily in the mid-Continent. NS also engages in ammonia transportation, asphalt & fuels marketing, and asphalt refining (on the East Coast). Its pipeline and storage businesses (~80% of EBITDA) are generally fee-based, with asphalt and fuel marketing (20%) more variable. Asphalt demand in particular remains weak today, especially from commercial/residential customers."

"NuStar GP Holdings: Fate Tied to NS - NuStar GP Holdings (NSH) owns the general partner (GP) of NS. NSH's primary cashgenerating assets consist of: 1) a 2.0% general partner interest in NS; 2) the incentive distribution rights in NS; and 3) 10.2MM NS limited partner units."

Asphalt Weakness and NS Leverage Leave Us at Neutral on NS and NSH: Lower NS PT to $57, Lower NSH PT to $33

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