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Friday, March 25, 2011

Motley Fool is doing a cash flow analysis on Enterprise Products Partners (EPD) and how it compares to some other MLPS. I sometimes think that they don't have a clear understanding on what mlps are and how they work but the piece is worth a read through..just in case they wind up being on to something.

MLPS are doing well today as most are up and the index is up just shy of 2 points today. The market is up again with the dow up 85 points. Some end of month pressures and end of quarter pressures are being to show up as no one is going to want to be caught short going into quarter end in my view. Cheinere LP (CQP) Alliance Resource (ARLP) and Markwest (MWE) are up major fractions and lead the winners list today. Nothing notable among the few losers today which are down just pennies.

Keep a watchful eye on natgas and yields on the longer maturities today. If they close firm it could be a very good sign that rallies in those markets are getting ready to take hold in the next
few weeks

Nat gas may be up to another one of its rocky/bullwinkle tricks of trying to pull a rabbit out of a hat but the trick never works. But we're always trying here!!!
The yield chart on the 30 year looks more interesting here as with all the reasons for flight to quaility, the correction from the 4.80% high has been relatively shallow. The yield is trading on support both in the daily and weekly chart so we could be at an important point here. The longer term trend for rates is higher so that's the way to bet it in my view.

5 comments:

Dave said...

You are right - Motley Fool does not get MLP's as a class. No understanding of tax deferred nature, requiremeent to distribute, need to grow via equity & debt,importance of ties to drop-down deal sources, etc. Bet they don't read a couple of the Seeking Alpha guys who do get them.

Dave

Unknown said...

They have repeatedly put up pieces that show their lack of understanding.

jack preston said...

what are your thoughts on epd? worked there back in the day. am long

Jack said...

joe,i am thinking a good play now is to buy MLPs that are partly owned by larger MLPs. I did this with DEP,even though it was easy cause DD always took care of his friends even from the grave. We know MLPs must grow to increase pay outs and the easiest and cheapest way is to buyout those you already own part of,imo. I own ETE cause EPD owns some and RGNC cause ETP owns a bunch. Looking for others in this incestuous industry

joewxman said...

that actually makes sense. MLPS have also been buying up gps which means Nustar might someday buy Nustar Holdings (NSH). Chairman of Nustar holds lots of shares in NSH.