×
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 19, 2014

Viewed 667 times

Week Thoughts: NGL Prices Vertical, MLPs Horizontal

MLPs were basically flat this week, but both the Alerian MLP Index and the Alerian Equal Weight MLP Index beat the S&P 500, which was down slightly.  Commodity price strength (see below) and slightly lower interest rates did not translate into much immediate MLP price strength.

Weekly MLP Review_1-17-14

Commodity prices were universally strong this week:

  • Crude oil prices rose 1.5%, but remains 4.5% lower than year end
  • Natural gas prices bounced back, +6.1% this week
    • Record natural gas storage withdrawal of 287 bcf
  • Ethane was up 22.8%, which seems like a lot, but is really just $0.06/gallon
  • Propane strength continues, +7.6% this week, makes it +70.6% year over year
    • 52-week highs for both propane and ethane
    • Propane closed the week at its highest price in more than two years (since 1/3/12)

MLP earnings season kicked off with the Kinder Morgan family of companies reporting results on Wednesday that were largely in-line with analysts’ expectations.  The earnings call included some table pounding by CEO Richard Kinder on behalf of what he views as a clearly undervalued Kinder Morgan Inc (KMI), see this WSJ.com blog post about the call.  There was less table pounding around EPB and KMP…  In any event, Kinder will be hosting an analyst day on January 29th to unveil its full year 2014 budget and long term distribution expectations for its various entities.
Winners & Losers
Brand new MLP Cypress (CELP) had a nice pop, rising each of its first 3 trading day to finish the week up 12.3%. On the downside, DKL led the sector lower (-6.9%) after Barlcays downgraded it from overweight to equal-weight. APU was under some selling pressure from ETP’s underwritten offering of APU units owned by ETP, but not weak enough for APU to land on the bottom five chart.

Top5Bottom5_1-17-14

For the year so far, CELP’s early strength catapults it right near the top of the list, alongside CLMT.  DKL dropped from the second spot to out of the top five, but is still up for the year. RNO and GLP continue to trade well early in 2014. In the top five are 3 MLPs with less than $500mm market caps and the average market cap of the top 5 is less than $1.0bn.

Top5Bottom5_1-17-14_YTD

It might be tempting to say that because the top 5 are small cap MLPs, it means small cap MLPs will outperform in 2014 or that you should buy more of them vs. larger MLPs. The top five or bottom five in any given year are typically the more volatile MLPs or are ones that have had a transforming transaction, neither of which are necessarily attractive traits in an MLP.  It is interesting and worth noting, however, that the top five is loaded with small caps, especially when the bottom 5 is loaded with MLPs that have more than $4.0bn market cap (like EPB, ETP and CMLP).
Poll Question
If you haven’t already, check out the 2014 Over Unders post from earlier this week and make sure your vote is counted.  I’ll tally those votes and summarize the results next week.  I will be implementing polls on a more regular basis going forward, some tied to specific weekly transactions, so hopefully that will generate some interesting results.  This week’s poll question is below. Sorry, there are no polls available at the moment.  
News of the (MLP) World

News-of-the-World

Equity

  • Amerigas (APU) announces that Energy Transfer (ETP) priced an underwritten public secondary offering of 8.0mm APU units at $42.73/unit, raising $341.8mm in gross proceeds for the selling unitholder (ETP) (press release)
    • Overnight offering, priced at 4.3% discount to prior close
    • Traded down 1.1% in the next session
  • Cypress Energy (CELP) prices initial public offering of 3.75mm common units at $20.00/unit, raising $75mm in gross proceeds (final prospectus)
    • Priced at the midpoint of the pricing range, which represents a 7.75% IPO yield
    • Opened trading at $20.00, reached a high of $21.74 (+8.7% from IPO price), before closing at $21.30 (+6.5%) on its first trading day
    • CELP is a services MLP that provides saltwater disposal wells and operates a pipeline inspection business
  • GasLog Ltd (GLOG) announces its Board of Directors has authorized the company to file a draft registration statement for an IPO of an MLP that would own certain of GLOG’s LNG carriers with multi-year charters (press release)

Other

  • Crosstex (XTEX / XTXI) and Devon (DVN) announce combined mistream business to be named EnLink Midstream (press release)
  • Cheniere Energy (LNG / CQP) announces CFO change (press release)
    • CFO Davis Thames ceased to serve on 1/14, replaced by Michael Wortley (internal promotion from prior role of VP, Strategy & Risk)
  • Ferrellgas (FGP) announces diversification initiative (away from propane), announces new SVP of Strategic Development to lead it (press release)

Distributions

  • Increases:
    • TRGP: $0.6075, +6.6% quarter over quarter
    • TEP: $0.315, +5.9%
    • HCLP: $0.51, +4.1%
    • TOO: $0.5384, +2.5%
    • TGP: $0.6918, +2.5%
    • NGLS: $0.7475, +2.0%
    • EPD: $0.70, +1.4%
    • KMP: $1.36, +0.7%
    • OKS: $0.73, +0.7%
    • LRE: $0.49, +0.5%
  • Flat
    • EPB (streak of 22 straight quarterly distribution increases officially ends), KMI, TLP, WPT, OCIR
RELATED CONTENT
No posts matching your criteria
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.
MLPguy Post
Week Thoughts: Midstream Captures More Downside The slow bleed in midstream continued this week. MLPs again lagged broader the Midstream Index (AMNA), because of Canadian midstream and a few large U.S. corporations. Higher commodity prices and strong broader equity market trading weren’t enough to get midstream moving higher...
MLPguy Post
Week Thoughts: Midstream Earnings Hit, Stocks Miss Midstream and MLPs were slight underperformers among energy stocks (XOP and XLE were largely flat) and underperformed general equities (as measured by S&P 500), which rallied 1.5%. Earnings, ex-dates for distributions and month-end strangeness whipped things around a bit in between a basically flat week.
MLPguy Post
Week Thoughts: MLPs Less Travelled Midstream basically kept pace with the broader market this week, while MLPs underperformed, again. Oil prices and broader equities were supportive, but that wasn’t enough to get MLPs moving ahead of EPD results Monday to kick off the meat of 3Q reporting season.
MLPguy Post
Week Thoughts: Midstream Inaction Quiet week in the stock market this week, which translated into a quiet week for midstream as well. The AMNA finished basically unchanged, while the MLP Index was slightly lower.
MLPguy Post
Week Thoughts: MLPs Brace for Earnings Midstream was negative across the board this week, and the MLP Index lost more ground to the other midstream indexes that include corporations. Lower oil prices, higher interest rates and general aversion to energy stocks were likely reasons for continued weakness for the sector.
MLPguy Post
Week Thoughts: Macro Noise Offsets MLP News After 5 straight negative days last week, midstream had three positive days this week, including an intra-day reversal Thursday and a positive Friday.
MLPguy Post
Status Update: Midstream Green in September Given the end of the month and quarter fell on a Monday, I wanted to get a quick post out with updated month and quarter end numbers. I hope you’ll understand if the upcoming weekly post is a bit shorter as a result.
MLPguy Post
Week Thoughts: MLPs Selloff On Purpose Risk was definitively off this week across energy stocks, commodities and the broader stock market. Naturally, utilities and REITs caught a bid, and midstream did not. Within midstream, Canada held up well and helped AMNA outperform the AMZ and AMUS.
MLPguy Post
Week Thoughts: Midstream Stocks Sustain September Surge Midstream stocks traded up amid a strong backdrop for energy stocks and for income stocks...
MLPguy Post
Week Thoughts: Scarcity Value Rally in MLPs Midstream stocks outpaced the S&P 500 and utilities this week in the face of falling oil prices and rising interest rates. MLPs were the best performers within midstream, benefitting from the “value rally”...
MLPguy Post
Week Thoughts: Market Advances, Midstream Unmoved It was a short, but steady week for midstream, helped by strong Canadian midstream performance that more than offset weakness from MLPs. Midstream stocks underperformed utilities and the S&P 500...
MLPguy Post
Week Thoughts: Takeout Bid Stops Midstream Bleeding Midstream broke out of its 6-week slump this week, helped by a private equity bid lobbed in Tuesday night, but also helped by risk-on broad market action and rebounding commodity prices.
MLPguy Post
Week Thoughts: Midstream Checked, Market Unbalanced Midstream stocks declined for a 6th straight week, this time joined by a pretty scary broad stock market decline on Friday. Broad market fear appears to be joining the energy sector antipathy and midstream apathy we’ve seen all summer.
MLPguy Post
Five Years Since Midstream Peak: Universe Update and In Memoriam The end of next week, the last trading day of August, will be the 5-year anniversary of the peak of the Alerian MLP Index.
MLPguy Post
Week Thoughts: Yield Inversion, Midstream Aversion Midstream stocks were down inline with broad equities this week, after a rally Friday that almost salvaged the week. It was a 4th straight negative week for midstream, and the MLP Index (on a price basis) now sits 11.3% lower than its high for the quarter reached in mid-July.
MLPguy Post
Week Thoughts: Un-Navigable Midstream Midstream and MLP stock performance accelerated to the downside this week, finishing with bigger losses this week than last week. It was also the 4th consecutive negative week for midstream, the longest such streak since late December.
MLPguy Post
Week Thoughts: Midstream De-Rated It was an inauspicious start to August for the stock market, for oil prices, and for the midstream sector due to the overriding influence of interest rates and tariff rates this week. MLPs had their second worst week of the year and worst week since early February.
MLPguy Post
Week Thoughts: Midstream Flagging into Earnings Barrage Midstream started the week strong Monday, but the bounce back was short-lived as midstream sold off each of the remaining days of the week, even as oil prices stabilized and the broad market rallied. Canada and a few larger corporations dragged down broader midstream indexes relative to the MLP Index, which continues to hold up well in a backdrop of upstream carnage.
MLPguy Post
Week Thoughts: Sweltering Energy Discontent Hits Midstream Midstream stocks, and MLPs in particular, held up ok this week, all things considered. This week saw a combination of negative macro forces converge to crush energy stocks more broadly.