10.13 +0.10 (1.00%)
Pre-Market: 6:43AM EDT
|Bid||10.01 x 2100|
|Ask||10.11 x 2000|
|Day's Range||9.98 - 10.25|
|52 Week Range||9.01 - 12.73|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.85%|
The US earnings season has begun for midstream energy companies. On April 18, 2018, Kinder Morgan (KMI) announced its first-quarter results.
USA Compression Partners (USAC), CSI Compressco (CCLP), and Archrock Partners (APLP) are up 11%, 32%, and 4%, respectively, so far in 2018. The compression services MLPs outperformed the Alerian MLP ETF (AMLP) and the Energy Select Sector SPDR ETF (XLE) during this period. AMLP and XLE are down nearly 7% and 1%, respectively, year-to-date.
Magellan Midstream Partners (MMP) stock has fallen nearly 11% so far in 2018. It’s underperformed its peers Enterprise Products Partners (EPD) and Plains All American Pipeline (PAA) during this period.
Between April 5 and April 12, 2018, energy subsector ETFs’ correlations with US crude oil May futures were as follows: the Energy Select Sector SPDR ETF (XLE): 91.8% the SPDR S&P Oil & Gas Exploration & Production ETF (XOP): 90.9% the Alerian MLP ETF (AMLP): 90.5% the VanEck Vectors Oil Services ETF (OIH): 82%
Cheniere Energy’s (LNG) 30-day implied volatility was 30.9% as of April 10, 2018, which is lower than the 15-day average of 36.5%. In comparison, the Alerian MLP ETF (AMLP) has an implied volatility of 23.6%. Cheniere Energy’s higher implied volatility compared to AMLP is mainly due to its export-led business and the fluctuation in global LNG (liquefied natural gas) prices. However, Cheniere Energy’s exposure to global LNG prices is expected to come down following recent sale and purchase agreements.
Amazon’s stock has plummeted after President Donald Trump took to Twitter to call for action against the company’s practices. Amazon took first place on the list followed by master limited partnerships (MLPs), which are finding themselves in a tough spot. Facebook was the third most popular topic as the company tries to contain a data breach scandal. Gold took fourth spot as investors bid up the precious metal in light of falling stock prices, while government bonds are last on the list. Check out our previous trends edition at Trending: Pressure Mounts on Facebook as Data Breach Conundrum Deepens.
Last month, the Federal Energy Regulatory Commission announced a ruling that prevents some master limited partnerships from using an important tax allowance, sending the stocks sinking. Some analysts have been defending MLPs, even as losses deepened, while others think there's more room to the downside. BMO Capital Markets' Ben Pham weighs in on the topic Monday, writing that while the market has made its preference known for more "asset-heavy" business models since the tax ruling, some out-of-favor names have been hit too hard, including Enbridge (ENB) and TransCanada (TRP). Pham argues that Enbridge and TransCanada have gotten too cheap, compared to peers, and the selloff looks overdone, due to their higher-expected dividend growth rates--some 10% through 2020.
Oil and gas stocks have created plenty of headaches for investors over the last several years. As crude oil prices crashed from over $100 per barrel in 2014 to a low of $30 in 2016, a lot of big-name energy investments suffered.Source: Shutterstock