Why Niska Gas Storage Partners' Shares Jumped Today

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Niska Gas Storage Partners jumped 13% today after the company completed a restructuring.

So what: The company converted subordinate units and distribution rights into new incentive distribution rights. The company couldn't increase its distribution to common unitholders without paying minimum distributions owed to these unitholders, which would have been about $12 million per quarter, and they would take a high percentage of added payouts.  

Now what: This reduces the risk Niska will have to reduce its distribution to pay back these incentive distribution rights holders and gives upside potential for investors. Both Goldman Sachs and StifelNicolaus liked the move because they upgraded the stock. The new structure gives common unit holders more upside, which should boost the stock long-term if fundamentals improve.

Interested in more info on Niska Gas Storage Partners? Add it to your watchlist by clicking here.

The article Why Niska Gas Storage Partners' Shares Jumped Today originally appeared on Fool.com.

Fool contributor Travis Hoium and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners