×
Triangles background
OUR COMPANY AND AFFILIATES
CBRE GLOBAL INVESTORS

CBRE Global Investors, combined with CBRE Clarion Securities and CBRE Caledon, is one of the world’s leading real asset investment managers providing real estate and infrastructure investment solutions to over 500 clients worldwide.

INVESTMENT MANAGEMENT

CBRE Global Investors

CBRE Clarion Securities

CBRE Caledon Capital Management

Trammell Crow Company

MLPguy
CBRE GROUP

CBRE Global Investors is the investment management division of CBRE Group, Inc. the world’s premier commercial real estate services and investment firm.  The company’s shares trade on the New York Stock Exchange under the symbol “CBRE.”

REAL ESTATE SERVICES

CBRE

CBRE Blueprint
Our Company and Affiliates

This website uses cookies to improve the user experience. By using our website you consent in accordance with our Cookie Policy. Read More

ACCEPT
Triangles background
Back to Insights

January 24, 2015

Viewed 670 times

Week Thoughts: MLPs Buoyant Into Earnings

MLPs continued the rally that began on 1/14/15 this week, finishing up 3 out of 4 days, even as oil prices dropped to fresh lows.  For the week overall, the Alerian MLP Index (AMZ) increased 3.0% and the Alerian MLP Equal Weight Index (AMZE) increased 2.8%.  In the 7 trading days since the 1/13/15 bottom, the AMZ has rallied 7.9%, while the AMZE has rallied 5.9%.  MLPs are still down for the year, but have an outside shot at a positive January, which seemed very unlikely a few weeks ago.
Weekly MLP Review_1-23-15
The broader U.S. stock market was stronger this week, with the S&P 500 up 1.7%.  Oil prices finished 6.7% lower this week, closing at a fresh 52-week low of $45.44.  Oil dropped on a higher inventory build than expected on Thursday (plus a stronger dollar), and fell again Friday after the death of King Abdullah of Saudi Arabia.  Natural gas erased last week’s 5.1% gain with a 5.1% decline.
Winners & Losers
Out of index, small-cap MLPs led the way this week taking the top 3 performance slots.  High-growth drop down names rounded out the top 5, with both VLP and PSXP up 12.4%.  On the downside, it was a mixed bag with recent IPO RMP down the most at 10.5% (and now down 13.5% since IPO).  EVEP was the only upstream MLP in the bottom 5 this week despite two distribution cuts from other upstream MLPs.
Top5Bottom5_1-23-15
EVEP was the only repeat offender on the bottom 5.  In the top 5, follow through has been limited, with winners fluctuating wildly from week to week.
Top5Bottom5_1-23-15_chart
Upstream MLPs occupy 4 out of 5 worst performing MLP spots so far this year. 2 Smaller, out of index MLPs make up most of the top 5.
Top5Bottom5_1-23-15_YTD
 
Top5Bottom5_1-23-15_YTD_chart
News of the (MLP) World
Kinder Morgan’s big news and earnings release captured all the attention this week.  KMI will try to hold that attention at next week’s analyst day.  Earnings releases of actual MLPs start this week with EPD, NS and a few others this week.  The fire hose of earnings releases that’s coming in the next few weeks will be a welcome change from a few pretty quiet months in terms of company-specific data points.  Some of the news won’t be pleasant, but at least it will help the market differentiate between which MLPs are in trouble and those that are not.
News-of-the-World
Debt and Equity

  • No transactions this week. As expected, it’s been a very slow start for MLP capital markets in 2015.

M&A / Growth Projects

  • Sunoco Logistics (SXL) announced successful open season for Delaware Basin oil pipeline extension project (press release)
    • The project includes 125 miles of new pipeline with initial capacity to transport 100,000 bbls/d of oil from the Delaware Basin production area to Midland, Texas
    • Pipeline will be in operation by the first half of 2016
  • Kinder Morgan, Inc. (KMI) announced $3.0bn acquisition of Hiland Partners, a private energy company owned by billionaire Harold Hamm (press release)
    • Hiland owns natural gas gathering and processing assets, oil gathering assets and the Double H oil pipeline in the Bakken Shale
    • Some of these assets were part of a public MLP Hiland Partner that went public in 2005 and was bought back by Harold Hamm in 2009
    • KMI expects the transaction to be modestly accretive to cash flow per share and expects the purchase price to represent a 10x multiple of 2018 EBITDA
    • KMI will need some serious equity to permanently finance this acquisition and maintain its 5.5 debt/EBITDA
  • Enterprise Products (EPD) announced it will move forward with Panola pipeline expansion after receiving customer commitments (press release)
    • The Panola NGL pipeline expansion includes adding 60 miles of new pipeline, as well as pumps and other equipment to increase capacity on the system by 50,000 bbls/d
    • The Panola NGL pipeline system originates near Carthage, Texas and extends to Mont Belvieu, Texas
    • Expansion expected to be in-service by 1Q 2016 and to expand capacity
RELATED CONTENT
No posts matching your criteria
MLPguy Post
Week Thoughts: Market Relief, MLP Grief The market found some relief on the stimulus bill, but midstream and MLPs lagged this week. Canada midstream helped the AMNA outperform the other midstream indexes. Oil prices fell further, and the lack of places to put oil in this climate is concerning.
MLPguy Post
Midstream Week Thoughts: Remote Detonation While the entire country worked remotely this week, the market had its worst week since 2008. This led to another week of staggering losses in midstream and oil prices. MLPs actually outperformed utilities and the DJIA this week and were roughly inline with the S&P 500 decline.
MLPguy Post
MIDSTREAM ELEPHANTS COMING HOME TO ROOST The balance between supply and demand of MLP paper has always been delicate. In the past it was a balance between perpetually growing inflows and equity issuance. There were times when equity offerings temporarily overwhelmed investor appetite for MLPs. But as liquidity has diminished in recent years, the structural risks to this group to a stampede to the exits grew larger.
MLPguy Post
Week Thoughts: Market Suspended, MLPs Canceled What a week. The oil price collapse dragged MLPs and midstream stocks down again this week. The group finished down a staggering 30%, which leaves YTD returns in less than 3 months at negative 40-50%.
MLPguy Post
Week Thoughts: From Russia, No Love for Midstream Midstream captured more downside, selling off again this week but for a different reason. Last week, midstream was down alongside the rest of the stock market. This week the market finished flat, utilities finished sharply higher with a big interest rate drop, but midstream sold off again.
MLPguy Post
Midstream Week Thoughts: Selling Goes Viral Midstream joined in on the biggest and broadest equity selloff in recent memory this week. This was the worst week for the S&P 500 and for MLPs since 2008. Oil dropped to the mid-$40s, interest rates and natural gas prices dropped to fresh lows.
MLPguy Post
Week Thoughts: MLP Erosion Resumes Stocks of all types were negative this short week (even utilities, barely), so despite a rally in commodity prices and a further drop in interest rates, midstream stocks were negative. MLPs were down for a 4th week in the last 5 weeks and were again the worst performing group in midstream.
MLPguy Post
Week Thoughts: Midstream Positive, Beyond Partnerships (BP) On the back of rebounding oil prices and an ever-higher stock market, midstream indexes were positive this week. In a familiar refrain, the broader AMNA index was well ahead of the MLP Index, reflecting better performance among corporations
MLPguy Post
Week Thoughts: Midstream Reprieve MLPs and midstream companies arrested their recent decline this week with a flattish week. The broad equity market had a strong week, helped by gains from some big tech firms on earnings results.
MLPguy Post
Week Thoughts: Somber Midstream, Market Mentality Midstream was negative this week, along with most other global equities and commodities.  Midstream outperformed broader energy stocks, but underperformed the S&P 500 and utilities, which continue to grind higher. 
MLPguy Post
Week Thoughts: Market Seeks Shelter, Not MLPs MLPs and midstream came back to earth this week, dragged down by oil and natural gas prices that were too weak to be ignored by midstream investors after 6 weeks of gains.
MLPguy Post
Week Thoughts: Midstream Phase Won Midstream gains kept rolling for a sixth straight week, again riding a strong broad equity market higher, and defying weakness in upstream energy stocks (XOP -3.6%).
MLPguy Post
Week Thoughts: Falling Tension, Rising Tide Lifts Midstream MLPs extended their winning streak to 5 weeks, but MLPs and midstream stocks were weaker towards the end of the week as oil prices and energy stock prices sank lower.
MLPguy Post
INFRASTRUCTURE DELIVERS MLPs have bounced 10%+ off the early December 2019 multi-year low and are enjoying a seasonal respite from fund outflows. Without the stress of daily extreme volatility and angst, now is an ideal time to re-evaluate midstream exposure and consider (or re-consider) listed infrastructure.
MLPguy Post
Week Thoughts: Clean Slate Midstream traded up for a 4th straight week since bottoming on December 3rd.  MLPs are up 12.7% from the bottom and the AMNA isn’t far behind with a 10% gain.
MLPguy Post
2019 Year-End Midstream Statistics The year ended this week, which you may have heard.  From this point forward, we forever will be closer to 2050 than 1990.  So, it is time to review the final results of 2019.
MLPguy Post
Week Thoughts: No Holiday Drama for Midstream Midstream traded up the first 3 days this week to cap a run of 7 positive days out of 8.  Then on a very low volume session Friday, midstream corporations and MLPs sold off a bit to finish the week slightly positive overall.  Midstream broadly was in-line with the broad stock market overall (S&P 500 +0.6%).
MLPguy Post
Week Thoughts: Pipelines Piping, MLPs A-Leaping Midstream’s bounce off the bottom continued this week. In basically a repeat of last week, the MLP Index gained 4.6% the first three days of the week and was flattish from Wednesday’s close through the end of the week.
MLPguy Post
Week Thoughts: Midstream Relieves Itself Midstream and MLPs ripped this week, continuing the rebound that began in the middle of last week. A benign broad market backdrop allowed midstream stocks and MLPs to rally on their own merits this week.
MLPguy Post
Week Thoughts: Midstream Trypophobia Midstream stocks took cues from the broad market this week, drifting lower early in the week before mounting a comeback later in the week, including a big Friday after the robust jobs report.
MLPguy Post
DECADENCE TO DECAY: A DECADE OF MLPguy As of this week, I have now been publishing thoughts on MLPs at MLPguy.com for more than 10 years. The usual end of the year reflection in the media and among investors will be magnified arbitrarily this year by the end of the decade.
MLPguy Post
Midstream Week Thoughts: Groundhog Day for Thanksgiving Monday was positive for midstream, capping a rare 3-day run of positive performance. But apathy reigned the rest of the week, as Midstream and MLPs traded down the rest of the holiday-shortened week.
MLPguy Post
Week Thoughts: Midstream Flattish, Finishes on Positive Note Midstream was almost positive week over week, but had to settle for two days of positive performance in a row.
MLPguy Post
Week Thoughts: Mariner Makes Midstream Mixed Midstream stocks were mixed across categories, with Canadian midstream outperformance offset by MLP weakness, but overall finished positive for the week, helped by broad market strength and income stock strength.