recently stated that they own a 58.7% stake in Holly Energy Partners, L.P. (NYSE:HEP) in a Form 13D/A disclosure that was filed with the SEC on Wednesday, November 1st. The investor owns 59,630,030 shares of the stock worth $2,038,750,726. The reporting parties listed on the disclosure included HollyFrontier Corporation 751056913, HollyFrontier Holdings LLC 900868306, Navajo Holdings, Inc 850284908, Navajo Pipeline GP, LLC 522364943, Navajo Pipeline LP, LLC 850484420, Navajo Pipeline Co, LP 751611333, Holly Logistic Services, LLC 050593172, Holly Logistics Limited LLC 274289116, HEP Logistics Holdings, LP 200833056 and Not found. The disclosure is available through EDGAR at this hyperlink.
provided the following explanation of their ownership:
Item 4 of the Schedule 13D is hereby amended by adding the
GP/IDR Restructuring and Second Amended and Restated Partnership Agreement
On October 18,2017, the Issuer entered into an equity restructuring agreement (the “Equity Restructuring Agreement”) with HEP GP, the general
partner of the Issuer and a whollyowned subsidiary of HollyFrontier, pursuant to which the Issuer incentive distribution rights held by HEP GP will be cancelled and the 2% general partner interest in the Issuer held by HEP GP will be converted into
a noneconomic general partner interest in the Issuer (together, the “GP/IDR Restructuring”). In consideration for the GP/IDR Restructuring, the Issuer will issue to HEP GP 37,250,000 common units of
The GP/IDR Restructuring closed on October 31,2017 (the “Closing”). Simultaneously with the Closing, HEP GP amended and
restated the First Amended and Restated Agreement of Limited Partnership of the Issuer, dated as of July 13,2004, as amended (as amended and restated, the “Second Amended and Restated HEP Partnership Agreement”) to reflect the GP/IDR
Restructuring. The Second Amended and Restated HEP Partnership Agreement also reflects HEP GP’s agreement to forgo $2.5 million in distributions per quarter for 12 consecutive quarters (for an aggregate of $30 million) beginning with the
first quarter in which units issued as consideration for the GP/IDR Restructuring are eligible to receive distributions.
The disclosure contained in this
Item 4 does not purport to be a complete description of the Second Amended and Restated HEP Partnership Agreement and is qualified in its entirety by reference to the Second Amended and Restated HEP Partnership Agreement, which is filed as
Exhibit 2 hereto and is incorporated by reference into this Item 4.
A number of other hedge funds also recently made changes to their positions in HEP. Ameriprise Financial Inc. acquired a new stake in Holly Energy Partners, L.P. in the 1st quarter valued at $351,000. Stifel Financial Corp acquired a new position in Holly Energy Partners, L.P. in the first quarter worth $329,000. Alliancebernstein L.P. acquired a new position in Holly Energy Partners, L.P. in the first quarter worth $310,000. Morgan Stanley boosted its stake in Holly Energy Partners, L.P. by 9.4% in the first quarter. Morgan Stanley now owns 415,147 shares of the pipeline company’s stock worth $14,825,000 after purchasing an additional 35,828 shares in the last quarter. Finally, Oppenheimer & Co. Inc. boosted its stake in Holly Energy Partners, L.P. by 10.9% in the first quarter. Oppenheimer & Co. Inc. now owns 9,125 shares of the pipeline company’s stock worth $326,000 after purchasing an additional 900 shares in the last quarter. 46.10% of the stock is currently owned by institutional investors and hedge funds.
A number of research firms have commented on HEP. Zacks Investment Research raised Holly Energy Partners, L.P. from a “sell” rating to a “hold” rating in a research note on Monday, October 23rd. Wells Fargo & Company reduced their price objective on Holly Energy Partners, L.P. from $35.00 to $34.00 and set a “market perform” rating on the stock in a research note on Friday, October 20th. Scotiabank set a $34.00 price objective on Holly Energy Partners, L.P. and gave the stock a “hold” rating in a research note on Friday, October 20th. UBS AG reduced their price objective on Holly Energy Partners, L.P. from $39.00 to $36.00 and set a “buy” rating on the stock in a research note on Tuesday, October 17th. Finally, BidaskClub lowered Holly Energy Partners, L.P. from a “sell” rating to a “strong sell” rating in a research note on Wednesday, August 23rd. Two equities research analysts have rated the stock with a sell rating, four have issued a hold rating and one has issued a buy rating to the stock. The company currently has a consensus rating of “Hold” and an average target price of $35.00.
Holly Energy Partners, L.P. (NYSE:HEP) last issued its quarterly earnings results on Tuesday, October 31st. The pipeline company reported $0.66 earnings per share (EPS) for the quarter, beating the Thomson Reuters’ consensus estimate of $0.46 by $0.20. Holly Energy Partners, L.P. had a return on equity of 34.14% and a net margin of 34.06%. The company had revenue of $110.40 million for the quarter, compared to analyst estimates of $113.01 million. During the same quarter last year, the company posted $0.33 EPS. The company’s revenue for the quarter was up 19.2% compared to the same quarter last year.
The firm also recently declared a quarterly dividend, which will be paid on Tuesday, November 14th. Stockholders of record on Monday, November 6th will be paid a $0.645 dividend. This is a positive change from Holly Energy Partners, L.P.’s previous quarterly dividend of $0.63. The ex-dividend date is Friday, November 3rd. This represents a $2.58 annualized dividend and a dividend yield of 7.55%. Holly Energy Partners, L.P.’s dividend payout ratio (DPR) is presently 207.38%.
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Holly Energy Partners, L.P. Company Profile
Holly Energy Partners, L.P., (HEP) is engaged in the business of operating a system of petroleum product and crude pipelines, storage tanks, distribution terminals, loading rack facilities and refinery processing units in West Texas, New Mexico, Utah, Nevada, Oklahoma, Wyoming, Kansas, Arizona, Idaho and Washington.
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