Really a good question! Is it buy on the rumor and sell on the news? Reminds me of the old days type of speculations in trading the sector MLPs! The FFO beat all the estimates and the S&P upgrades EPD. I agree with the assumption that valuation should be rising. Also, S&P raised its estimate of EPD valuation to $59 per share. When everyone is suggesting accumulation od EPD shares, the price should not be headed down. I've not seen any data on future distributions but expectations may be high going forward even though the huge profits will have to be shared with the Duncan shareholders, etc. Very interesting question though so we'll have to dig around for the answer. Nevertheless, this is hard to understand..........
positive jobs news and alot of trader/investors ran to high beta names, mlp's and larger divi payers often get left out of momentum events and even drop when traders pull money out to put in the fast moves... don't read too much into it. EPD fundamentals and long term growth look very strong... as mentioned before day/week moves are impossible to figure our and even harder to predict.
Did you listen to the conference call or read the transcript? Do you realize how much EPD went up the last 2 days?
As I state over and over looking to figure out the daily or weekly price movements is impossible. If you could you would be a millionaire.
That said there are a couple of things in the details that suggest people got over enthusiastic.
#1 - A change to increase the distribution rate will be made AFTER the 1Half 12 projects come on line. Not now, Not next quarter. For my investors 6 months is forever.
#2 - Their distribution coverage was about 1.5X without 1 time items. This is right in line with past quarters.
#3 - EPD announced that their organic buildout is so great that they will have a lower distribution coverage in 2012 and part of 2013 than last year.
All of this means that patience will be needed to get the distribution ramped up. CS came out yesterday with a report suggesting a $52 target and distributions for YE 2012 at .65. With distributions going up by 6% instead of a bit under 5%. Does that suggest a huge runup almost overnight?
Last, some are traders and those people took profits.