Raising Cash, Selling Dead Weight

Over the last two weeks I sold a couple of things. First, as I mentioned in my articles, I sold my small position in Johnson & Johnson (NYSE: JNJ). It's getting well above its average valuation and I wanted to lock in those gains.

I also sold half of my position in Aflac (NYSE: AFL) in a different account which I manage. I'd been long Aflac for several years, and as the company nears its ten-year average valuation, I've lightened up some and raised cash. I am still long Aflac and, in fact, I think it might have some more gains ahead of it.

I've also been selling some "Dead weight" in legacy energy positions. I got rid of a tiny position in Kinder Morgan Inc (NYSE: KMI) which was lingering in an IRA which I manage for myself. Glad to be rid of that. Also, I sold a legacy position in Mid-Con Energy Partners (NYSE: MCEP). Frankly, I don't believe things are looking too well for that name if crude oil is going to remain in the 40s long-term, which looks increasingly likely. I may put some of the remaining capital into Williams Partners (NYSE: WPZ), or I may just hold onto the cash.

In this environment I am valuing cash more and more, and raising it where I can. There are some good values out there, such as AbbVie, British Telecom, Williams Partners and IBM, but I personally do not have much dry powder, so I am inclined to hold onto the cash I have at this point.

Added More Williams Partners

Glutton for punishment? Hopefully not. In this big 10% correction I added shares of dry-gas focused pipeline MLP Williams Partners (NYSE: WPZ). Williams Partners now yields 9.3%, and while many people now have concerns about energy-based income plays, I'm not too worried about Williams Partners. Dry gas has actually held up a lot better than oil, and dry gas activity continues to increase. Williams Partners' Transco pipeline is the best dry gas asset in the country.

So, long story short, I added more of Williams Partners. Growth expectations are high, but even if distributions don't grow at all, Williams is a stellar value right here and I think it's much less risky than most realize it to be.

Added Williams Partners

Added shares (units) of Williams Partners LP (NYSE: WPZ) this morning. Happy to pick up more of this great partnership. Williams is the owner and operator of the Transco Pipeline, a bi-directional pipeline between the Gulf Coast and eastern seaboard. Gas can flow from Appalachia to New York or to the Gulf Coast, or from the traditional Gulf Coast - East Coast like it has been for so long..

Anyways I'm rambling. Fantastic 9% yield. That's going to fall as Williams merges with ACMP. However, I think we can expect a 4.5%-5% yield at this price with 10%-12% growth. I'll take it. 

Little commodity exposure, really. The Marcellus is in dire need of pipelines to better markets, and once those Marcellus producers get a good pipeline connection, they have a cost advantage over pretty much everyone. 

Bought more WPZ today, added to already big position

In spite of my own fears, I'm trying my best to be greedy while others are fearful. Today I picked up some more shares of Williams Partners, the operator of the terrific Transco Pipeline. Pretty much anything energy is ridiculously cheap right now, so investors can really pick anything. I picked the best midstream dry gas partnership there is (next maybe to Kinder Morgan).

Williams Partners currently yields 8% and should achieve high mid-single digit growth as the country (and world) continues along its 'supercycle' shift to dry gas. That yield will drop when the company merges with Access Midstream Partners, but growth should increase to 10%-12%. I'll take it. This sucker's at a 52-week low and it has little to do with oil. If I could buy every share there is I would. Looking forward to many years of good income and high growth. Can get in on the ground floor right here.

See, I'm trying to talk myself out of being worried.