UBS ON THE HORN

UBS is sounding the trumpets this morning and upgrading 2 of the bigger cap MLPS...Oneok LP (OKS) and Teppco (TPP) to buy from hold. The charts below tell us that of the 2 Oneok (OKS) has been the better performer. In fact the weekly chart of Oneok still looks pretty good with the longer term uptrend in tact.


The daily chart is trailing the MLP index pretty well which does not look that good lately.

Meanwhile Teppco has been prett much going sideways for the last couple of years since they have hardly raised its distribution in the last couple of years. So it trades more like a bond really than anything else.




Meanwhile yesterday Breitburn announces a nice deal and pre-announces a hefty distribution increase and the stock prices does nothing. It joins E V Partners (EVEP), Copano (CPNO) Linn Energy (LINN) among others who have pre-announced distribution increases for the next few quarters and the stocks are selling at much lower prices then they have been for quite awhile. Shows you what happens when your group goes from being in favor to being out of favor. Another measure of disfavor could be seen yesterday with Encore Partners (ENP) which started trading yesterday. It priced mid range at 21 (offered 20-22)..opened at 21 and closed 10 cents above that.

This morning we have no corporate headlines. Crude oil is at 79.89 this morning as 80 dollars looms large after trading above that yesterday. Natural gas is down this morning after a 3 day big rally of a buck and a half. Stock futures are higher this morning and the 10 year is resting around 4.40%.

Yesterday the MLP index managed a small up close for the first time in 5 sessions. One poster questioned whether hedge funds have anything to do with this arguing that the group is too small for hedge funds to bother with MLPS. I would point out that at least one hedge fund that blew up in early August and remember when you are illiquid to begin with and someone is selling something because they have to and not because they want to, you see larger than normal volume and 4-6 point down spikes. Remember August 6th folks as our crash day and we've been recovering from that day ever since. I still maintain that we're seeing a more orderly liquidation being orchestrated here by other hedge funds that continue to unwind their positions. The good news in my view is that this is coming to an end in the next few weeks and has offered us many long term bargains.