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MLP Screening – Did The Market Overreact To Some 10%+ Yielding MLPs And Should We Value Them Differently?

Summary MLPs have held up relatively well against the commodity price decline until it recently plunged ~20% in the last 3 months. Alerian MLP ETF currently yields 8.5% with a select number of names trading well above 10% distribution yield. MLPs have largely been safe yield vehicles – will there be a shift in investor base and change in how investors value MLPs? Disclaimer: For avoidance of doubt, any reference to MLP excludes E&P MLPs for the purpose of this article. Alerian MLP Index (AMZ) Price Performance (click to enlarge) Alerian MLP Index Yield vs. Other Indices (click to enlarge) MLPs have been an efficient route for midstream asset owners to monetize their stake in assets that have largely contracted or recurring cash flow characteristics at valuations that far exceed private transaction multiples. For investors, it has been a very attractive/safe yield vehicle (and tax friendly) underpinned by a consistent and high growth profile as billions of new capital got deployed for new drilling and infrastructure developments. At a very high level, most MLPs service the upstream and/or downstream value chain in providing long-term recurring services. A recurring revenue stream ensures stable cash flow and given that 90% of distributable cash flows are required to be distributed in order to maintain MLP classification, investors enjoyed stable cash yield. Continued expansion of infrastructure and oil & gas exploration activities also led to high-single digit to double-digit growth in distribution. As a result, distribution yield (with growth embedded) kept falling and valuations kept going up. MLPs were also able to grow through acquisitions, using its extremely cheap cost of capital to acquire businesses at high multiples, which were still accretive from a distributable cash flow (“DCF”) point of view. While investors can view MLP businesses using more traditional valuation metrics such as EV/EBITDA and P/E, in real life, and in a grossly oversimplified form, valuations are quoted based on distribution yield. Again, in a very simplified manner, if you were to dissect distribution yield, the market essentially assigns a cost of equity (what level of levered cash flow the business should generate in perpetuity) and subtracts a growth rate on the DCF – and this dictates the distribution yield that the market bases its valuation/stock pricing for that particular MLP company. Let’s dig a little deeper in terms of this valuation concept. This was a perfectly feasible method of valuation for a number of reasons. 1) DCF for an MLP is actually very predictable and stable (EBITDA – maintenance CapEx – interest expense was very stable), 2) because it is very predictable and MLPs are required to distribute that DCF to investors, it made even more sense to value the business from a DCF/distribution perspective, 3) growth through backlog and continued capital spend in the broader oil & gas industry was also very visible and the implied valuation derived from a yield (or multiples if you invert the yield) standpoint was far in excess of general market valuation, and therefore, using EV/EBITDA or P/E where the general market trades at ~9-10x EBITDA and ~16-18x earnings obviates any sense of comparability. Said in a different way, DCF growth rate is what moved the needle from a valuation standpoint and was therefore the most important variable in determining how the stock price would move. To avoid any psychological biases, let’s remove the “MLP” classification for a second and just consider them as a normal c-corp business. Also, let’s work under the premise that there is no debate around the fact that the commodity price environment is challenging and there are lots of uncertainties and macro headwind pervading the market. For simplicity, let’s take out the near-term growth component and say there is no growth for the next year or two. Even without growth prospects, these are excellent businesses with contracted/recurring cash flows, minimal capital requirement to maintain earnings power, and minimal operational complications (often times there are pricing protection through contracts and even annual CPI escalators). How much would you pay for this type of business? Maybe there will be a slight dent in EBITDA this year or next year (not many names are really taking a hit on cash flow, they are just growing at a slower rate), but if the premise is that there is always cyclicality in the commodity market and things will turnaround to get back into a nice growth trajectory in a year or two from now, how much would you pay off next year or two-year forward FCF? To take a more draconian stance, even if there was no growth trajectory in a year or two from now, is it truly justifiable to say that many of these businesses should trade at 500-1000bps above debt instruments with equivalent credit ratings? When was the last time you were able to pick up a stock for 4-9x levered free cash flow even if there was a dim outlook for businesses that possess this quality? For the purpose of identifying “better” quality – off the top of my head, few high level components to look for in terms of evaluating the fundamentals of these businesses: 1) Contract structure (duration, minimum volume commitment, take-or-pay % vs. throughput %, fixed fee vs. commodity price dependent fee, inflation escalator); 2) Customer credit (liquidity, credit ratings, leverage), types of customers (E&P, refinery, other midstream, logistics, export demand, etc), customer diversity (having customer concentration through an excellent customer may sometimes be more favorable than having mediocre quality diversified customer base); 3) Liquidity (cash + RCF availability); 4) Geography (if volumes are growing at a certain geography or basin, it doesn’t matter if commodity prices are falling for the midstream provider); 5) Maintenance capital as % of EBITDA; 6) Growth capital need and payback period (some businesses like a pipeline are capital intensive in the beginning but it’s all about maintaining existing volume and increasing utilization whereas some businesses require continued capital spend to service both existing and additional customers; it’s a tough dynamic if you are in a spot today where you are asked to spend capital in hopes that you will utilize them in the future) While there was always some level of premium/discount for MLPs depending on sub-sector, commodity price exposure, contractual structure, maintenance/growth capital need to maintain cash flow profile, geographic footprint and size consideration, today’s market where many players are trading at yields that imply distribution cut and at a meaningfully compressed valuation relative to few months ago and versus the broader market, it definitely seems like an interesting environment where MLPs are interesting not just as a safe haven and perpetual dividend asset but an opportunity to generate alpha through capital appreciation. During this oil crash since summer of 2014, you have consistently seen sub-sectors get crushed, only to see a lagged pick up among “better quality” names (E&P, OFS, LNG, Petchems, etc). This sequence of overreaction immediately followed by a quick and steep rebound among quality names is common across all sectors during a market sell-off. While this article does not address a specific recommendation and may be repeating what is already well recognized among investors, I wanted to provide 1) a quick screening of MLP names that are under oversold categories and 2) perhaps a different perspective around decoupling from the prevalent methodology of looking at MLPs like a fixed income security to a more traditional equity security (especially in light of what the valuations imply at today’s price and for those who think investing in MLPs today is like catching a falling knife). Below is a quick screening based on MLPs trading above 10% 2015E distribution yield (I am sure I am missing a few names that have above 10% yields). Second table excludes names with net debt/’15E EBITDA above 5x. There is not much science for drawing the line at 5x but wanted to exclude names that may be trading at compressed valuations due to distress and/or were previously highly levered to rapid growth prospects. Again, I have no idea if the excluded names are truly in distress or sized debt prematurely with too much embedded growth – just wanted to make the bifurcation. MLP Universe (NYSEARCA: AMLP ) – Names trading above 10% distribution yield Source: Capital IQ – Crestwood Midstream (NYSE: CMLP ), Crestwood Equity (NYSE: CEQP ), Southcross Energy (NYSE: SXE ), Azure Midstream (NYSE: AZUR ), Hi-Crush (NYSE: HCLP ), Natural Resource Partners (NYSE: NRP ), CSI Compressco (NASDAQ: CCLP ), Cypress Energy (NYSE: CELP ), American Midstream (NYSE: AMID ), Teekay Offshore (NYSE: TOO ), Capital Product Partners (NASDAQ: CPLP ), Midcoast Energy (NYSE: MEP ), Martin Midstream (NASDAQ: MMLP ), Exterran Partners (NASDAQ: EXLP ), Targa Resources (NYSE: NGLS ), DCP Midstream (NYSE: DPM ), USA Compression (NYSE: USAC ), Teekay LNG (NYSE: TGP ), NGL Energy (NYSE: NGL ), Oneok Partners (NYSE: OKS ), Suburban Propane (NYSE: SPH ). MLP Universe – Names trading above 10% distribution yield and less than 5.0x net debt / ’15E EBITDA Source: Capital IQ – Crestwood Midstream, Crestwood Equity, Azure Midstream, Hi-Crush , CSI Compressco, Cypress Energy, Teekay Offshore, Capital Product Partners, Martin Midstream, Exterran Partners, Targa Resources, DCP Midstream, Oneok Partner , Suburban Propane. Disclosure: I am/we are long CELP. (More…) I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The Time To Hedge Is Now – Or Is It Too Late?

Summary Brief overview of the series. Will equities continue falling further on Monday? Things to remember about this strategy and hedging in general. How are we doing so far? Discussion of the risks inherent to this strategy versus not being hedged. Back to August 2015 Update Strategy Overview It is not too late to hedge, but doing it cheaply is getting harder. Most of my positions are working, but not all have shifted into gear yet. I will discuss this aspect of the strategy a little later. But the positions I listed in the August Update have already jumped by an average of 75.7 percent in just three weeks. But this, as series followers know, could be just the beginning. If you are new to this series you will likely find it useful to refer back to the original articles, all of which are listed with links in this instablog . It may be more difficult to follow the logic without reading Parts I, II and IV. In the Part I of this series I provided an overview of a strategy to protect an equity portfolio from heavy losses in a market crash. In Part II, I provided more explanation of how the strategy works and gave the first two candidate companies to choose from as part of a diversified basket using put option contracts. I also provided an explanation of the candidate selection process and an example of how it can help grow both capital and income over the long term. Part III provided a basic tutorial on options. Part IV explained my process for selecting options and Part V explained why I do not use ETFs for hedging. Parts VI through IX primarily provide additional candidates for use in the strategy. Part X explains my rules that guide my exit strategy. All of the above articles include varying views that I consider to be worthy of contemplation regarding possible triggers that could lead to another sizeable market correction. Part II of the December 2014 update explains how I have rolled my positions. I want to make it very clear that I am NOT predicting a market crash. I just like being more cautious at these lofty levels. Bear markets are a part of investing in equities, plain and simple. I like to take some of the pain out of the downside to make it easier to stick to my investing plan: select superior companies that have sustainable advantages, consistently rising dividends and excellent long-term growth prospects. Then I like to hold onto to those investments unless the fundamental reasons for which I bought them in the first place changes. Investing long term works! I just want to reduce the occasional pain inflicted by bear markets. If the market (and your portfolio) drops by 50 percent, you will need to double your assets from the new lower level just to get back to even. I prefer to avoid such pain. If the market drops by 50 percent and I only lose 20 percent (but keep collecting my dividends all the while) I only need a gain of 25 percent to get back to even. That is much easier than a double. Trust me, I have done it both ways and losing less puts me way ahead of the crowd when the dust settles. I may need a little lead to keep up because I refrain from taking on as much risk as most investors do, but avoiding huge losses and patience are the two main keys to long-term successful investing. If you are not investing long term you are trading. And if you are trading, your investing activities, in my humble opinion, are more akin to gambling. I know. That is what I did when I was young. Once I got that urge out of my system I have done much better. I have fewer huge gains, but had also have eliminated the big losses. It makes a really big difference in the end. A note specifically to those who still think that I am trying to “time the market” or who believe that I am throwing money away with this strategy. I am perfectly comfortable to keep spending 1.5 percent of my portfolio per year for five years, if that is what it takes. Over that five year period I will have paid a total insurance premium of as much as 7.5 percent of my portfolio (approximately 1.5 percent per year average, although my true average is less than one percent). If it takes five years beyond the point at which I began, so be it. The concept of insuring my exposure to risk is not a new concept. If I have to spend 7.5 percent over five years in order to avoid a loss of 30 percent or more I am perfectly comfortable with that. I view insurance, like hedging, as a necessary evil to avoid significant financial setbacks. From my point of view, those who do not hedge are trying to time the market. They intend to sell when the market turns but always buy the dips. While buying the dips is a sound strategy, it does not work well when the “dip” evolves into a full blown bear market. At that point the eternal bull finds himself catching the proverbial rain of falling knives as his/her portfolio tanks. Then panic sets in and the typical investor sells after they have already lost 25 percent or more of the value of their portfolio. This is one of the primary reasons why the typical retail investor underperforms the index. He/she is always trying to time the market. I, too, buy quality stocks on the dips, but I hold for the long term and hedge against disaster with my inexpensive hedging strategy. I do not pretend that mine is the only hedging strategy that will work, but offer it up as one way to take some of the worry out of investing. If you do not choose to use my strategy that is fine, but please find a system to protect your holdings that you like and deploy it soon. I hope that this explanation helps clarify the difference between timing the market and a long-term, buy-and-hold position with a hedging strategy appropriately used only at the high end of a near-record bull market. Will equities continue falling further on Monday? This is the $64 million question, is it not? Consider this: the three major indexes all closed at the daily lows. Momentum appears to be to the downside if there is any carry over from the panic selling on Friday. Volume was also the heaviest near the close. I did a little analysis of how many stocks fell how much for both the S&P 500 (NYSEARCA: SPY ) and Dow Jones Industrials (NYSEARCA: DIA ) and the results were interesting. In the Dow there were 22 of the 30 component companies down more than 10 percent; 14 down more than 15 percent; and 10 down more than 20 percent. For the S&P 500 the results were also quite dramatic: 348 down by more than 10 percent; 236 down more than 15 percent; and 153 down by more than 20 percent. This was after just four down days! Oh, and the market breadth, as can be expected, was horrible with zero new 52-week highs and 627 new 52-week lows on the NYSE. Of course, that is not an indicator; but it is an ominous result. Why did investors all head for the doors at the same time? Many investors have accumulated huge gains in a relatively small number of stocks. The momentum was favorable for a long time and it just kept churning higher without apparent regard to valuation. Several issues got way ahead of where they belonged based upon respective future prospects. Investors were willing to pay as much as double what they should have been willing to pay for expected levels of growth. What was the catalyst that started the slide? I think that concerns over global demand have finally caught the eye of Wall Street. China is not growing at anywhere near the seven percent rate officially reported. Chinese officials claim that domestic consumption is growing at a ten percent pace this year. If imports are down and manufacturing output is down, then what are those consumers buying? Domestic consumption is one of the key inputs into GDP growth calculations and it is the one piece of the pie that external observers cannot find a proxy with which to measure it. Shipping tonnage into the country tells us much about imports. Exports are measured by all the receiving nations. Manufacturing is measured using the Purchasing Managers Index, which has stubbornly remained in contraction territory. Retail sales and services data are all collected and reported by the Chinese government. It is the one thing government controls and can manipulate. I just do not see how consumption can grow ten percent when there is no concurrent growth in imports or manufacturing. The other concern is how low will the price of oil go and what impact will it have on the energy industry? I have written extensively on this recently in my “Energy Sector Outlook” series and other articles, the links to which can be found here . The price of WTI crude dipped under $40 on Friday but bounced back above that crucial psychological level. Will it hold? Maybe for a few days or weeks, but not for much longer, in my opinion. This video from Bloomberg expresses why I think the price for oil can go lower into fall. Finally, I want to include a link to the recent letter to clients from John Hussman. I know he has been crying wolf for a long time and many have ridiculed his diatribes about how the market will fall. In his defense, many of the most reliable indicators that have foretold previous corrections and bear markets have not worked in the current environment of artificially low interest rates and quantitative easing which have stimulated asset valuations to soar and profit margins to reach peak levels artificially. I say artificially because if interest rates were to be normalized margins would be much lower (cost of money would be higher reducing profits) and asset prices would also be much lower. He has been on the wrong side until now. But the one chart he uses from Bank of America Merrill Lynch about half way down the letter is very compelling. It shows client net buys by client type for the last week and four weeks. The only client type that is net positive in buying is corporations buying back shares. All others (Institutions, Hedge Funds and Private Clients) have all been net sellers. So, corporation have been propping up share prices and now that type of buying is likely going to dry up, too. Something to think about. In a nutshell, if equities on the Shanghai exchange continue to fall in the face of government intervention and if the price of oil cannot hold above $40 on Monday, I believe our equity markets will likely have further to fall. To go a little further, I believe that as long as those two situations continue to be negative the outlook for global equity markets will also remain negative. I am keeping my eye on those two tells to help me determine when the worst is over. You might want to do the same. Things to remember about this strategy and hedging in general First thing to remember is that this strategy is not designed to work aggressively until the broad market indices are down by 15 percent. Then the gains should really start to kick in. The second thing to remember is that these candidates will underperform the market during a recessionary period. If the equities market corrects without the U.S. economy falling into a recession, then the potential gains for these candidates will not be as great. I am protecting myself against a “major” downturn in stocks, not against a mild correction. I am still invested for the long term, so I am not hoping for a crash, but I am also not putting my head in the sand and ignoring that the potential for equities to go much lower is real. When the S&P 500 index get to a negative 15 percent from its May high, assuming we are entering a recession, this strategy will suddenly begin to kick into high gear as equities fall further. It is between a drop of 15 percent and 30 percent where most of the gains will be acquired by the positions listed in previous installments of this series. If the market firms without reaching that level and turns higher, I may be faced with yet another year of rolling our positions to situate my portfolio for what comes next. I do not give up on my strategy as it will pay off in the end. Until then, it is just insurance against a collapse. If no collapse comes (highly doubtful that central banks have finally figured out how to prevent recessions forever) I will have given up less than one percent of my portfolio per year for the peace of mind in knowing that I am covered just in case. How are we doing so far? The answer depends upon when we bought our puts and at which strikes. Overall, each set of options listed in each article are in positive territory when taken as distinct groups. Individually, some are still worth very little. I own some of both, big winners and losers. Below I list the options I have listed in previous articles since April 2015, all of which expire in January 2016. Stock Symbol Strike Price Premium Paid Premium Available Gain / Loss % Gain / Loss GT $15 .50 .10 – .40 – 80% GT $18 .55 .15 – .40 – 73% GT $20 .50 .20 – .30 – 60% GT $25 .70 .90 + 20 + 29% GT $22 .30 .35 + .05 + 17% BID $30 .50 .85 + .85 + 70% BID $35 .90 2.25 +1.35 +150% BID $31 .55 1.10 +.55 100% ETFC $15 .42 .10 – .32 -76% ETFC $17 .55 .29 – .26 -47% ETFC $20 .69 .60 – .09 -13% ETFC $25 .84 1.95 +1.11 +132% ETFC $22 .43 .78 +.35 + 81% KMX $35 .95 .10 – .85 – 90% KMX $35 .65 .10 – .55 – 85% KMX $40 1.15 .25 – .90 – 78% KMX $40 .90 .25 – .75 – 72% KMX $55 1.85 2.65 +.80 +43% KMX $55 1.40 2.65 +1.25 + 89% KMX $57.50 1.80 3.70 +1.90 +106% JBL $15 .25 .30 +.05 + 20% JBL $18 .40 .95 +.55 +138% JBL $15 .20 .30 +.10 + 50% LB $40 .50 .05 – .45 – 90% LB $50 1.00 .15 – .85 – 85% LB $56.50 1.25 .45 – .80 – 64% LB $56.50 .95 .45 – .50 – 53% LB $65.50 1.10 1.15 +.05 + 5% LB $70.50 1.85 1.95 +.10 + 5% LB $72 1.45 2.30 +.85 + 59% LB $70.50 1.50 1.95 +.45 + 30% MAR $50 1.25 .40 – .85 – 68% MAR $50 .65 .40 – .25 -39% MAR $55 .80 .60 – .20 – 25% MAR $50 .55 .40 – .15 – 27% MAR $65 1.75 2.80 +1.05 + 60% MAR $62.50 1.45 2.05 +.60 + 41% LVLT $40 1.10 .90 – .20 – 18% LVLT $42 .90 1.55 +.65 + 72% MS $25 .76 .31 -.45 – 59% MS $25 .28 .31 +.03 + 11% MS $28 .44 .61 +.17 + 39% MS $34 .92 2.29 +1.37 +149% MS $35 .96 2.80 +1.84 +192% MU $17 .60 3.55 +2.95 +492% MU $17 .40 3.55 +3.15 +788% MU $20 .49 5.90 +5.41 +1104% MU $18 .33 4.30 +4.97 +1203% MU $15 .47 2.28 +1.81 +385% MW $45 .75 .90 +.15 +20% RCL $42 1.26 .08 -1.18 – 94% RCL $50 1.22 .22 -1.00 – 82% RCL $45 .78 .12 – .66 – 85% RCL $47 .67 .15 – .52 – 78% RCL 62.50 1.45 .86 – .59 – 41% RCL 72.50 1.65 2.26 +.61 + 7% STX $40 .48 1.25 +.77 +160% STX $38 .58 .91 +.33 + 7% STX $35 .43 .55 +.12 + 8% STX $35 .52 .55 +.03 + 6% TPX $35 2.10 .05 -2.05 – 98% TPX $35 .75 .05 – .70 – 93% TPX $50 1.45 .30 -1.15 – 79% TPX $60 1.50 1.05 – .45 – 30% UAL $28 .87 .10 – .77 – 89% UAL $35 1.26 .35 – .91 – 72% UAL $37 .92 .55 – .37 – 40% UAL $32 .62 .09 – .53 – 85% UAL $37 .81 .55 – .26 – 32% VECO $20 .45 1.05 +.60 +133% VECO $20 .40 1.05 +.65 +163% WSM $55 1.90 .15 -1.75 – 92% WSM $55 1.60 .15 -1.45 – 91% WSM $60 1.65 .35 -1.30 – 79% WSM $60 1.85 .35 -1.50 – 81% WSM $60 1.25 .35 – .90 – 72% WSM $70 1.90 1.35 – .55 – 29% WSM $72.50 1.80 2.00 +.20 + 11% Some positions are already doing well, most notably Micron Technology (NASDAQ: MU ). I decided to do an account at this time because I will may not many more recommended positions for now. It seems to me that we could either have the market go down further, in which case new positions would be very expensive; or we may not have another good entry point (new market highs) before year end at which time I would begin to roll my positions to expirations further into the future. Finally, I can imagine what some readers are thinking: there are a lot of those options that are still deep in the hole. I have not given up on those positions either. If the U.S. economy enters a recession I remain confident that those stocks will fall a long way from current levels and provide decent protection. Of course, some will do better than others. Hang in there. There may be much further down to go! One final note: if enough readers request in the comments section that I list my favorite options yet again, I will follow up as quickly as I can with what I would do now if I were not fully protected. I will do a follow up article with new recommendations only if there are more than five comments from more than five individuals requesting that I do so. There are still some good options out there, but we really need to be selective now and it will cost a bit more. Brief Discussion of Risks If an investor decides to employ this hedge strategy, each individual needs to do some additional due diligence to identify which candidates they wish to use and which contracts are best suited for their respective risk tolerance. I do not always choose the option contract with the highest possible gain or the lowest cost. I should also point out that in many cases I will own several different contracts with different strikes on one company. I do so because as the strike rises the hedge kicks in sooner, but I buy a mix to keep the overall cost down. My goal is to commit approximately two percent (but up to three percent, if necessary) of my portfolio value to this hedge per year. If we need to roll positions before expiration there will be additional costs involved, so I try to hold down costs for each round that is necessary. I do not expect to need to roll positions more than once, if that, before we see the benefit of this strategy work. I want to discuss risk for a moment now. Obviously, if the market continues higher beyond January 2016 all of our new option contracts could expire worthless. I have never found insurance offered for free. We could lose all of our initial premiums paid plus commissions. If I expected that to happen I would not be using the strategy myself. But it is one of the potential outcomes and readers should be aware of it. And if that happens, I will initiate another round of put options for expiration beyond January 2016, using from up to three percent of my portfolio to hedge for another year. The longer the bull maintains control of the market the more the insurance will cost me. But I will not be worrying about the next crash. Peace of mind has a cost. I just like to keep it as low as possible. Because of the uncertainty in terms of how much longer this bull market can be sustained and the potential risk versus reward potential of hedging versus not hedging, it is my preference to risk a small percentage of my principal (perhaps as much as three percent per year) to insure against losing a much larger portion of my capital (30 to 50 percent). But this is a decision that each investor needs to make for themselves. I do not commit more than five percent of my portfolio value to an initial hedge strategy position and have never committed more than ten percent to such a strategy in total before a major market downturn has occurred. The ten percent rule may come into play when a bull market continues much longer than expected (like three years instead of 18 months). And when the bull continues for longer than is supported by the fundamentals, the bear that follows is usually deeper than it otherwise would have been. In other words, I expect a much less powerful bear market if one begins early in 2015; but if the bull can sustain itself into late 2015 or beyond, I would expect the next bear market to be more like the last two. If I am right, protecting a portfolio becomes ever more important as the bull market continues. As always, I welcome comments and will try to address any concerns or questions either in the comments section or in a future article as soon as I can. The great thing about Seeking Alpha is that we can agree to disagree and, through respectful discussion, learn from each other’s experience and knowledge. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…) I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Additional disclosure: I hold at least one put option position (multiple contracts) in each of the stocks listed in this article.