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May 12, 2012

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Winners and Losers: Copano Soup for You

Distribution ex-dates, oil and stock market prices being down, and at least $1.5 billion in new equity issued conspired to take down MLPs this week.  GPs did very well, closing virtually flat on the week.  Variable distribution MLP were the big losers, TNH, UAN and RNF in particular were hit hard, each was down more than 14%, with RNF’s 18.6% price drop leading the way down.  MLP Index’s 2.5% price decline was the worst weekly loss since August 19, 2011, almost nine months ago.

RNO got a little bounce this week after dropping the most in the sector last week.  In terms of secular growth MLPs (i.e. ones that go up more consistently than NRP and RNO’s bounce), OILT and CQP were both up big.  CPNO’s earnings announcement and dissapointing guidance / distribution announcement saw its stock get slammed.  Maybe CPNO gets frustrated enough to take a buyout offer from some other MLP that might be better able to monetize its assets.  Chesapeake was down in tandem with its parent, CHK, particularly late Friday afternoon.

Not much to get excited about out in the economic and financial media, but maybe that’s a good contrary indicator of some potential positive shift going forward, or maybe not.  We shall see.

Year to Date
Buckeye creeps into the YTD bottom 5 this week, after dropping another 7.1% this week, wow.  It is very unusual to see ARLP and BPL in the bottom five this late in the year, but it speaks to the challenging fundamentals in their respective businesses, although BPL’s GP buyout and growth projects were self-made challenges.  After another strong week (+4.2%), CQP is now up 41.7% for the year, not including distributions.

On a price basis (no distributions or dividends included), the MLP Index turned negative this week.  Oil is now down 4% for the year, adding to the unpleasant environment caused by dropping natural gas and NGL prices.  MLP pure-play general partners and variable distribution MLPs are still outperforming, but the variable distributions MLPs have come down to earth of late.

That’s all I got this week, moving to Texas in 12 days, posting might be sporadic as I coordinate that and the NAPTP Conference next week.  Thanks for reading.

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