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CQH fold-in and other natural gas and telecom follow-ups +2


Cheniere Energy is proposing to exchange all outstanding CQH shares for 0.45 LNG shares.  This is part of a broader industry remove in response to changes to the tax code which are unfavorable for MLPs (master limited partnerships).  I probably will not continue to own and cover LNG following the transaction.  Although I see solid growth for natural gas over the next decade or two, the entirety of Cheniere is a far different investment prospect.  Nonetheless, I am in no hurry to sell.  We have a dividend for those who own CQH at the close today, and I think there is the possibility of the premium increasing; it was initially a mere 1%, and that has eroded in today's trading.

There are also further developments with CUI Global, which has received a repeat half million dollar order for a biomethane-to-grid unit from a major European industrial company.  This follows the company's GasPT Tech Workshop, which it says garnered attendance from all of the U.K.'s largest natural gas players.  Although the order represents less than 1% of annual revenue, I do think both announcements show that the CUI Global is starting to get traction.  However, if Westport's latest announcement that it is selling its natural gas compressor business  in Cherasco, Italy to Snam S.p.A. for €12.5M is a sign of progress thawing at Snam, that may be the best news of all for CUI investors.

Switching to telecoms, I hope subscribers appreciated the advance notice on the Vodafone opportunity.  That may close quickly following two insider purchases in London.  It's also good to see CTL shares shrugging off an analyst downgrade, which strikes me as even more clueless than usual when juxtaposing its focus on sales with recent results and management's comments.  I'll also note that CenturyLink is continuing to divest minor fiber assets as stipulated by the L3 merger.  This was already covered and has no impact on the outlook, but I still get questions.  What's also been covered, but continues to evolve with potentially more impact is the Net Neutrality situation.  Stay tuned.