This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Oiltanking Partners -- A Sleeper IPO

NEW YORK (TheStreet) -- Social networking may get all the buzz, but Oiltanking Partners (OILT) could be the sleeper IPO this month.

The Houston-based company is expected to price its offering this week, and it's looking to raise $200 million, selling 10 million limited partnership units with pricing seen between $19 and $21.

At that level, the company, which is involved in the storage, terminaling and transport of crude oil and related products, is roughly valued in line with its peers. If the pricing comes in at the $20 midpoint of the range, Oiltanking would have a price-to-book ratio of around 3.1X.

That's below 3.3X for KinderMorgan (KMP) and Enterprise Products (EPD); but higher than Energy Transfer (ETP)and Copano Energy (CPNO), which are both at 2.1X.

Another plus is that Oiltanking is ready to give back. The company is planning on a dividend yield of 6.8%, which is higher than most of its peer group. Only Energy Transfer comes in higher at 7.3%. This moderate pricing, combined with the nice yield, could create continuing demand once the company is public.

Most investors look at exploration and refining, but the storage and terminaling are a critical part of the oil industry as well. Oiltanking Partners is a limited partnership, whose general partner is Oiltanking Holdings Americas, a wholly-owned subsidiary of Germany's Oiltanking GmbH, which is the second largest independent storage provider for crude oil and refined products.

Oiltanking has 17 customers with agreements at the Houston terminal and 16 at the Beaumont, including Royal Dutch Shell, Exxon Mobil, Lyondell Basel ND Enterprise Products Partners. The Houston terminal typically signs customers for five to twenty years. Beaumont's customers tend to have shorter agreements because they mostly store vacuum gas oil, which has a shorter contract life.

While it's in the process of renewing many customers' contracts, the company currently operates the only independent vacuum gas oil and clean petroleum products handling and storage business in the Beaumont, Port Arthur area.

Year-to-date, there have been 12 energy IPOs raising $5.1 billion, the second largest group following technology, which has had 30 deals. The average first-day return for energy offerings is 3.3% and an average total return is 4.2%, according to Renaissance Capital.

--Written by Debra Borchardt in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,880.36 -31.75 -0.19%
S&P 500 1,970.07 +0.12 0.01%
NASDAQ 4,462.9020 +20.2040 0.45%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs