KNOT Offshore Partners: No Acquisition For Now - Buy The Dip (Rating Upgrade)

Henrik AlexInvesting GroupFollow5ShareSavePlay(8min)CommentsSummaryKNOT Offshore Partners' common units sold off after the partnership failed to agree on the terms of an acquisition by parent Knutsen NYK.While disappointing, the setback provides an opportunity to get exposure to the only U.S. exchange-listed shuttle tanker pure play.With market conditions strengthening, healthy cash flows should facilititate additional vessel dropdowns from Knutsen NYK thus resulting in further improved profitability and even higher cash generation.Assuming continued execution, I would expect the upward trend to resume once markets have regained their footing.Consequently, I am upgrading KNOP's common units from "Hold" to "Buy" with a price target of $15.00.Looking for a helping hand in the market? Members of Value Investor's Edge get exclusive ideas and guidance to navigate any climate. Learn More »Bjoern Wylezich/iStock Editorial via Getty Images Note: I have covered KNOT Offshore Partners LP (KNOP) or "KNOP" previously, so investors should view this as an update to my earlier articles on the company. Please note also that KNOT Offshore PartnersThis article was written byHenrik Alex20.93K FollowersFollowI am mostly a trader engaging in both long and short bets intraday and occasionally over the short- to medium term. My historical focus has been mostly on tech stocks but over the past couple of years I have also started broad coverage of the offshore drilling and supply industry as well as the shipping industry in general (tankers, containers, drybulk). In addition, I am having a close eye on the still nascent fuel cell industry.I am located in Germany and have worked quite some time as an auditor for PricewaterhouseCoopers before becoming a daytrader almost 20 years ago. During this time, I managed to successfully maneuver the burst of the dotcom bubble and the aftermath of the world trade center attacks as well as the subprime crisis.Despite not being a native speaker, I always try to deliver high quality research to followers and the entire Seeking Alpha community.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in KNOP over the next 72 hours. 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. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.