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

KNOT 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.