Something Old, Something New
Editor’s Note: Elliott and Roger will host the first MLP Profits Live Chat on Feb. 6, 2012, at 2:00 p.m. EST. This is your opportunity to ask questions about specific Portfolio recommendations or broader trends in the MLP patch. Click here for more details and to sign up for an email reminder about this event.
The strength of a master limited partnership’s (MLP) underlying business determines the sustainability and growth of its distribution; scrutinizing quarterly earnings and listening to management’s conference calls provide insight into a company’s growth prospects. In this issue, we dig into the quarterly results from the three Portfolio holdings that have reported fourth-quarter earnings.
In the past 12 months, a dozen master limited partnerships (MLP) have gone public. We expect this trend to continue, as energy infrastructure owners seek to monetize their midstream assets and take advantage of investors’ demand for high-yielding securities.
You don’t need to be one of the lucky insiders to receive units before the MLP trades on a public exchange; some initial public offerings (IPO) are outstanding buys long after they go public.
We add all new IPOs to our How They Rate coverage universe and assign each name a buy, hold or sell rating based on our analysis of the company’s business and fundamentals. Partnerships often grow their distributions rapidly in their first two years as a public company.
Investing in MLP IPOs can be lucrative, but selectivity is critical to distinguishing the winners from the losers. Some new MLPs boast solid assets and a workable strategy to grow their distributions; others go public so their sponsors can exit their position and turn a profit. Understanding the difference between solid and questionable MLP IPOs requires taking a close look at the firm’s underlying assets and growth prospects. This issue features our take on the five MLPs that went public in the back half of 2011.
In This Issue
The Stories
1. MLPs face a new challenge in 2012: valuation. Taking advantage of the market’s misperceptions and pricing inefficiencies will be the key to outperforming in 2012. See The Price is Right?
2. The strength of an MLP’s underlying business determines the sustainability and growth of its distribution; scrutinizing quarterly earnings and listening to management’s conference calls provide insight into a company’s growth prospects. Here’s how our Portfolio holdings have fared thus far this earnings season. See Crunching the Numbers.
3. The latest batch of initial public offerings in the MLP space yields a few potential winners and some likely losers. See Kicking the Tires.
The Stocks
The strength of a master limited partnership’s (MLP) underlying business determines the sustainability and growth of its distribution; scrutinizing quarterly earnings and listening to management’s conference calls provide insight into a company’s growth prospects. In this issue, we dig into the quarterly results from the three Portfolio holdings that have reported fourth-quarter earnings.
In the past 12 months, a dozen master limited partnerships (MLP) have gone public. We expect this trend to continue, as energy infrastructure owners seek to monetize their midstream assets and take advantage of investors’ demand for high-yielding securities.
You don’t need to be one of the lucky insiders to receive units before the MLP trades on a public exchange; some initial public offerings (IPO) are outstanding buys long after they go public.
We add all new IPOs to our How They Rate coverage universe and assign each name a buy, hold or sell rating based on our analysis of the company’s business and fundamentals. Partnerships often grow their distributions rapidly in their first two years as a public company.
Investing in MLP IPOs can be lucrative, but selectivity is critical to distinguishing the winners from the losers. Some new MLPs boast solid assets and a workable strategy to grow their distributions; others go public so their sponsors can exit their position and turn a profit. Understanding the difference between solid and questionable MLP IPOs requires taking a close look at the firm’s underlying assets and growth prospects. This issue features our take on the five MLPs that went public in the back half of 2011.
In This Issue
The Stories
1. MLPs face a new challenge in 2012: valuation. Taking advantage of the market’s misperceptions and pricing inefficiencies will be the key to outperforming in 2012. See The Price is Right?
2. The strength of an MLP’s underlying business determines the sustainability and growth of its distribution; scrutinizing quarterly earnings and listening to management’s conference calls provide insight into a company’s growth prospects. Here’s how our Portfolio holdings have fared thus far this earnings season. See Crunching the Numbers.
3. The latest batch of initial public offerings in the MLP space yields a few potential winners and some likely losers. See Kicking the Tires.
The Stocks
Teekay LNG Partners LP (NYSE: TGP)–Buy < 41 in Growth Portfolio
Kinder Morgan Energy Partners LP (NYSE: KMP)–Buy < 80 in Conservative Portfolio
Navios Maritime Partners LP (NYSE: NMM)–Buy < 20 in Aggressive Portfolio
Sunoco Logistics Partners LP (NYSE: SXL)–Buy < 32 in Conservative Portfolio
Inergy Midstream LP (NYSE: NRGM)–Buy < 23 in Growth Portfolio
Mid-Con Energy Partners LP (NSDQ: MCEP)–Buy in How They Rate
Memorial Production Partners LP (NSDQ: MEMP)–Hold in How They Rate
Rose Rock Midstream LP (NYSE: RRMS)–Buy in How They Rate
Stock Talk
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