This week and until Labor day volume of mlp's is traditionally very low. History has shown for mlp,s Sept and Oct are the poorest performing months.Since the KM influx commentary has not taken hold I just see today a slow movement from KM family to Targa family ,MMP EQM HCLP MWE types on rebound. I wait to see when KM group passes government monopoly test and then date of conversion to see the major influx to those named. MWE holding so far. Citi mlp conference Aug 20 and 21 MEMP EROC SMLP OILT EPD juist a few
Barron's as I said before 15 years ago was relevant to investing public They could move stocks the way Cramer did 5 years ago. Even CNBC and individual brokers have lost their charm. I feel that the public for the most part is out of stock market. What has taken over is index funds ETF's and specialized funds for the most part. Traders use program trading and hedge funds are more prevalent in moving the market. That is why if you learn mlp's especially at this dynamic time in oil and gas history you can do better than the general market for perhaps next 2 years..
Oil price of brent and wti was falling-less driving and drawdown of oil light . Then Ukraine geopolitical scare and oil reversed. The USA will move LNG export as the #$%$ to Russia strength and in 10 years Russia oil and NG will equal OPEC power over oil today. The KMI rollup has just started and those wanting better terms through mlp funds will move billions from cash into other mlp's. Targa and MWE have become #1 and 2 for KMI USA buy. They will be trading at premiums from this point foward, The entire mlp group will be selling at high end once cash out for EPB and KMP and KMR happens. Once Sept and 1/2 Oct passes it will be business as usual. Lets not forget those unhappy with WMB handling of WPZ or ACMP will also be on the prowl for other mlp/s EPD settlement will cap foward movement. In one month KMP KMR EPB ACMP WPZ left the fold. A good thing for MWE
Royal Dutch Shell has been having a worldwide restructuring due to mediocre profit worldwide. So one should make some assumptions having to do with USA. This has been going on for about six months. All talk of crakers and such are really being orchestrated from europe and major outlays of money are subject to their worldwide profit plans,
Chrx FYI CNX slides etc available from Goldman Sachs Pipeline mlp conference which they presented 8/12
Hclp sellers were not company. When it retreats into 50's I will buy some. Sxl is in the narrowest of range bound. I follow CS model and the TP is 50. Let me comment about buying mlp,s this month and next. The distributions for this quarter are set. In fact the guidance and distribution increases per quarter is already set for end of year, Market has moved for mlp group these 7 months, There is nothing to be gained by buying anything now in summertime. So wait until prices drop a little more and towards end of Sept, Hurricaine season and oil dropping and drillers retreating and NG not yet winter. There will be good buys After EPD splits people sell off 1/2 or some. Still have to work out ETP 600M judgement. ETE a couple months away from SUSS combo- more than few from ferc total approval LNG- OILT additional tanks in service and TX City drop and pipe loop comnnection a few months away-MMP MWE EQM a couple of months down line. HCLP EMES SLCA mellowing NG prices rising Lastly some more words from government about condensates Always my take on things Marv
Not as much thin as almost slowest day of year today. NO reason to buy MWE now ,as next 2 months are poorest for mlp's. Only Aug 14 may have up day. Pick your price or better buy alittle every 2 point drop and dollar average down. I have no crystal ball but expect mlp's to slide somewhat. That is only my personal opinion not to be followed except if doing this for years. Oil is nearing excess supply and drillers are selling off therefore midstream halo is not there presently.
BPL secondary today. I don't like fact that HCLP went up day before secondary but that is mlp secondary system. Put shares out when price is at highest. The more I think about Kinder, and I have bought and sold the group for more than 15 years, and made thousands, is the negative press they received about KMP paying KMI so much profit first and remaining a 5% grower. This is a game changer EPD saddled with low cagr and 4-6B projects near term is a internal organic grower. WMB has deceided on making WPZ ACMP chk associated rollup and until more positive numbers stuck in making it a go before additional expansion or buy. PAA not big enough or have a goal to expand big time. ETE deceiding to just collect distributions from all and become a holding company. If not so involved with their projects would have made Targa , a jewel. another subsidiary and paid their price as with SUSS SXL Southern ETC. They are best value buyers around. So KMI is left.
Take your pick of yesterdays events that moved the price of MWE 1/ Barron's article that mentions MWE among about 10 other mlp,s. (OILT) also mentioned had one of it's lowest daily volume days also mentioned 2. KMP roll up Kinder talking about capital cost reduction and now ability to have a better ability to buy co's in his present space . Associated views that Targa and MWE were good future candidates 3. Funds selling their Kinder family stakes and replacing with good interest and growth candidates who have large stock capitalization 4. Three analysts of major brokerage co's upgrading their TP of MWE. My take to have this stock volume is funds moving stakes in .
Ete has a number of things that must happen before they change to c corp or such. SUSS has to be merged with Sunoco gas stations then an IPO They must get Ferc approval for LNG terminal then IPO to fund 4B as JV with ETP. They also have 2 projects one with ETP as a JV and another both majors requiring alot of money. If they take another go at NGLS &co that will derail them further. I pwersonally think only ETE or KMI can take on NGLS-TRGP. WMB is in the merging of ACMP WPZ and that will take a few years. EPD is almost a mirror of NGLS therefore no government approval. PAA is not big enough. I have my largest holding in ETE so it is really dynamic times
The Kinder Morgan roll up has vast implications. Richard Kinder just on CNBC constantly talked about cost of capital and acquasitions. It now is a 140B company. It now puts in play all companies in the 10B-15B capitalized range in play. The other players that would be competetive to KMI are ETE EPD WMB PAA Therefore MWE and NGLS,TRGP looks as if KMI is a very strong possibility of being bought by them . This is added to the fact that probably 25-40B will be unlocked from selling of Kinder family and has to find a home i.e. MWE NGLS etc It probably makes the Aug 14 to Oct 14 period manageable for mlp followers
The article has alittle for everybody and many mlp's named. I am very happy that they lead off with my favorite topic of who has the docks and storage in the Gulf. Blum at Wells Fargo is usually on each conference call of majors and someone who I think knows his stuff. I must warn all that analysts have some selfinterest because they want investment banking for their companies. So you will have mlp days by CS and WF. It is part of the business of brokerage houses,
Thanks. Barron's once upon a time was the poor man's newsletter. Buy a copy and use as a IRS deduction. Most important is who is writing it ,meaning which analyst or company. THANKS AGAIN
Money I know that being outspoken always attracts sparks. The board interesting enough has become the 4 of us. There has to be some sanity to investing in mlp's. I have been trying for 5 years to give some rules to invest by. I also have said that in last 15 years I have changed my focus on mlp investing to what it is now the most dynamic times for oil and gas mlp's. What ever your feelings are about a particular stock you have to go by company guidance. Then match it against another company/s guidance. It is not rocket science. Everbody makes assumptions and rationalizes their choices. I only hope that those who want to make better choices Therefore, coverage of distribution-CAGR-company guidance of distributions- company projects when they are completed plus 12 months and most important dropdowns or buys that are immediately
accreative and lastly analyst target prices. It is not so hard to pick good choices.
I agree that MWE is correctly priced presently. But the tenant of the stock market is analyst concensus and how a company does in comparison to COMPANY guidance. Therefore company,s performance Since for us DCF, coverage of distribution or they will ask for a secondary and add more shares. are what we follow. The negative is always if they fail then price will be hit. By the way that happened to MWE with all their projects projections and positive talk they were hit in 2012 and 2013. EPD is a perfect example of the best mid stream mlp with high coverage very conservative but a penny a quarter increase selling for a premium and overpriced except for premier status. I don't get making ETE a high flyer. They are grounded with ETP RGP and indirectly SXL SUSS and LNG export with a host of JV projects in making But to each his own