Tag Archives: EPD

What’s next for MLPs?

For my first post back I want to update the last post I did before my hiatus. On Feb 10, I posted on how well the MLP sector did in January, with it being the second best January ever, and that good early year performance usually leads to strong results going forward. Lets see what the MLP sector has been up to since then. The chart below shows the performance of the AMJ ETF that tracks the MLP sector. What a year so far is all I can say! The MLP index total return for Q1 2013 was 19.7%, far … Continue reading

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December portfolio review

A relatively non eventful month for my portfolio, especially compared to last month, but nonetheless there were a few changes made. Most of the changes that were made were short term in nature given my uncertainty in the market. All my IRA accounts are run on the IVY timing portfolio and this month there was one new buy signal for those portfolios as discussed here. This is a 100% automatic mechanical system with great long term results. No need to second guess it by considering any short term issues. For my trading accounts there were a couple of changes. Overall … Continue reading

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EPD Q2 2012 earnings results – strong and resilient

Maybe it’s the contrarian in me but I keep expecting EPD to disappoint. Or maybe I’m hoping they disappoint so I can buy a ton more shares. But alas I was the one disappointed yet again. EPD reported strong Q2 2012 results on Aug 1st. Full release is here. Lets see how strong and resilient their results were. We are now smack in the middle of MLP earnings season with Kinder Morgan having kicked it off last week. So far the trend in the results has been some weakness in the numbers mainly due to lower oil and NGL prices. … Continue reading

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EPD Q4 2011 earnings results – investing for future growth

Enterprise Products Partners (EPD) reported Q4 2011 earning results on Feb 25, 2012. Being the largest MLP my market cap I think its important to look at their results and more importantly their outlook. Details of the earnings can be found here. In short, EPD does not only continue to outperform, they continue to knock the cover off the ball driven by the NGL businesses. Also, there are some important differences between EPD and other MLPs that are worth paying attention to. Lets dive in. CEO Micheal Creel summarize the results as follows: “We generated $3.7 billion of distributable cash flow … Continue reading

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MLP valuation for January 2012

It’s a good time to update the valuation for one of my favorite sectors for income investors and retirees, MLPs. MLPs had another great year in 2011, especially during Q4. The sector returned 14% for the year vs 2% for the SP500. I’ll spare everyone the suspense buildup of the next 600 words or so and say that I think that the sector is slightly overvalued on a short term basis but many individual MLP names are offering good value. On a longer term view the sector is still very compelling. As I write this on Jan 13, 2012 there … Continue reading

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MLP valuation at August end

It’s been since May that I updated my table on MLP valuation. With the recent volatility in the market and the month of August coming to an end it is a good time to take a look at MLP valuation. Lets jump right in. As I’ve done before, I updated my top 5 MLP table which also includes the MLP index, AMZ. I like to use both relative and absolute value metrics for any investments and I think the two best are dividend yield and the spread to the 10yr treasury note. Here is the updated table. MLPs, the AMZ, … Continue reading

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Not all MLPs are created equal

Its pretty common investment wisdom that a bull market hides a lot of mistakes. Companies of all types, quality, and sizes go up together. Fortunately, this doesn’t last forever. Tough markets tend to separate the wheat from the chaff and expose any weaknesses in business models, cost of capital, etc… I’ve noticed this taking place in the MLP space recently. The table below shows a list of the MLPs that I track and how much they have come off their 52 week highs. Some difference. The strongest performance has been put in by EPD which is down only 4.46% from … Continue reading

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MLP taxation: the upside of ending the tax break

In my last post I described what I consider the worst case scenario for MLPs in the event that their tax favored status ends overnight. Today I want to look at a few of the upsides of such an event. Yes, I do think there are upsides to ending the MLP tax favored status. I can think of four upsides right away; incremental share demand, potential higher valuations, expanded business opportunities, and pricing power. Lets look at each of these possibilities. While the MLP sector has enjoyed strong and increasing investor demand over the years the tax complications and tax … Continue reading

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MLP taxation – the worst case scenario

What is the worst that could happen? That’s a question I always ask myself when making an investment. I look at the major risks posed to an investment and do a worst case scenario analysis with respect to that risk factor. When it comes to MLPs probably the major risk associated with an investment in the sector is the potential ending of their preferred tax status by the government. Over the years rumors of the ending of the MLP tax preferred status has caused the sector to sell off several times and I’m sure has kept many investors away from … Continue reading

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EPD Q1 2011 results- thank heaven for NGLs!

Enterprise Products (EPD) reported Q1 2011 results on May 10. 2011. All in all I can’t say or do much except stand up and extend EPD a hearty golf clap. Results were impressive to say the least. I’ll let them do the talking. The full press release is here. “Enterprise had a record first quarter to begin 2011,” stated Michael A. Creel, president and CEO of Enterprise. “Our 50,000-mile system of natural gas, NGL, refined products, crude oil and petrochemical pipelines continues to operate at record or near record volumes. We are continuing to benefit from production growth in the … Continue reading

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