MLPs and Energy Prices

With fears of slowing global economic growth weighing on oil prices and rising US inventories pressuring the value of certain natural gas liquids, investors have expressed concern that units of upstream and even midstream master limited partnerships could be poised for a pullback. In this issue, we review our Portfolio holdings’ exposure to fluctuations in commodity prices and the extent to which further weakness would damage their growth stories.

First-quarter results indicated that our Portfolio holdings effectively managed the steep decline in the price of natural gas. We expect second-quarter results to reflect lower oil and NGL prices but hedges and a solid slate of growth projects should offset these challenges.

In This Issue


The Stories

1. Oil prices appear to be approaching a bottom, while our favorite upstream publicly traded partnerships’ hedging programs should cushion the blow to second-quarte cash flow. See Oil Outlook and Upstream MLP Update.

2. Understand your portfolio holdings’ exposure to commodity prices before you decide to change horses in the midstream segment. See Don’t Change Horses Midstream.

The Stocks


Linn Energy LLC (NSDQ: LINE)–Buy < 40 in Growth Portfolio
Vanguard Natural Resources LLC (NYSE: VNR)–Buy < 30 in Aggressive Portfolio
Legacy Reserves LP (NSDQ: LGCY)–Buy < 32 in Aggressive Portfolio
Mid-Con Energy Partners LP (NSDQ: MCEP)–Buy < 26.50 in Aggressive Portfolio
DCP Midstream Partners LP
(NYSE: DPM)–Buy < 40 in Growth Portfolio
Sunoco Logistics Partners LP (NYSE: SXL)–Buy < 33 in Conservative Portfolio
Niska Gas Storage Partners LLC (NYSE: NKA)–SELL in How They Rate
Cheniere Energy Partners LP (AMEX: CQP)–SELL in How They Rate
Chesapeake Midstream Partners LP (NYSE: CHKM)–Buy < 31 in How They Rate
Western Gas Partners LP (NYSE: WES)–Buy < 48 in How They Rate
TC Pipelines LP (NYSE: TCP)–Buy < 47 in How They Rate
Williams Partners LP(NYSE: WPZ)–Buy < 60 in How They Rate
Spectra Energy Partners LP (NYSE: SEP)–Buy < 33 in Conservative Portfolio
Regency Energy Partners LP (NYSE: RGP)–Buy < 29 in Growth Portfolio
Energy Transfer Partners LP (NYSE: ETP)–Buy < 50 in Growth Portfolio
Inergy Midstream LP (NYSE: NRGM)–Hold in Growth Portfolio

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