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March 9, 2012

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Winners & Losers: Money Flow Favors Small Cap MLPs

The MLP Index was down 0.7% this week, compared with a flat week for the S&P 500 and gold.  Oil was up slightly on the week, natural gas dropped to fresh lows and was down 6.1% week over week, which was marginally negative for most MLPs.

Despite the MLP Index being down 0.7%, it was a balanced week for MLPs.  33 of the 70 MLPs I track were up, 37 were down.   Small caps did much better than large caps (which dominate the MLP Index).  The 37 MLPs that had negative weeks were down on average 1.73%, but the 33 MLPs that were positive were up on average 2.36%.  Small cap stocks outside of the MLP sector had a solid week as well, as evidenced by the 1.8% increase for the Russell 2000 Index week over week.

RNO, CPLP and OXF, all down big last week, bounced this week.  PAA was in the bottom 5, which can be attributed to the $400 million of equity PAA issued Tuesday.  FGP and NRGY reclaimed the bottom of the bottom of the sector this week, after a brief respite for propane MLPs last week.  After some snow last week in Boston, we had 2 days with 60 degree plus weather, which can’t help the propane set.

MLPs are still trailing stocks for the year.  GPs are outperforming MLPs significantly again.  Variable distribution MLPs, dominated by the fertilizer MLPs that have been on a tear this year.  Natural gas is still the big loser.

Not much change in the year to date winners and losers chart.  OXF bounced this week, but not enough to make up for the earnings-related slaughter last week.   Cheniere Energy and Mid-Con Energy Partners are still tops in the sector.

More to come in my Week Thoughts post later this weekend, including some thoughts on the KMI deal, and some of the speeches that were reported on from CERA.

Disclosure: The information in this article is not meant to be financial advice, I am not your financial advisor and I am posting my comments for informational purposes only.  

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