Jonathan S. Vyorst is Senior Vice President of Paradigm Capital Management, where he manages several deep-value-oriented funds including a “special situations” portfolio: “An old and important part of value investing.” Sunoco Logistics (SXL) is a publicly traded limited partnership formerly controlled by Sunoco.
SXL is now controlled by Energy Transfer Partners (ETP), which acquired Sunoco in 2012. This “special situation” was “much more valuable than the market recognized,” stated Mr. Vyorst in a March interview, but now this value has been unlocked. Yet is it time to revisit Sunoco Logistics as a standalone investment?
As reported to the SEC on May 15, 2013, the Chief Financial Officer of Sunoco Logistics, Marin Salinas, has been buying shares in the open market, most recently 2,750 shares at $62.86 per share. This puts Mr. Salinas’ current holdings at 5,150 total shares.
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On the other side of this trade is Jerry Swank, the Founder and Managing Partner of Swank Capital, with 35 years of experience in investment management and investment analysis.
In a interview at the start of 2012, Mr. Swank describes his sell decision on Sunoco Logistics: “A company like SXL, Sunoco, is a great company, made a lot of money, but the stock has gone up so much, 25%, 30% last year. And we brought it at yields of 7%-plus, and today it yields 4.3%. So we think we’ve generated most of the upside off of the stock. Even though we love the company, we just think its price performance from here is going to be pretty muted.”
Currently yielding 3.7%, SXL is trading above Mr. Swank’s sell decision.
Recommended Reading – Why ‘say on pay’ won’t work, Fortune
November 16, 2009