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Tuesday, May 03, 2011

Another 5 points have come off the mlp index today as that tax story is getting legs apparently or at least profit taking after a big run is underway and right through the ex distribution cycle. Is the move in mlps a signal that rates are about to embark in another leg up? That might be a bit of a stretch since the move from the mid 3s to the mid 4s on the long end didn't do much to scare investors. Energy stocks as a whole are selling off today so there is another headwind for the group.

Lots of 1 point plus losses on the board in a host of issues. However Holly Partners (HEP) is up 1.49 on no particular news item that i could find. Atlas Pipeline Partners (APL) is down 2.33 after i highlighted this morning with its earnings, which apparently were already baked into the cake. Boardwalk Partners (BWP) is down 1.50 on downgrades by Raymond James and UBS.

2 comments:

harold said...

What is the historical industry average of PE ratios for MLPs? Thank you for all your work, it's appreciated.

joseph said...

you cant really use pe because of all the distortions with the mlp structure. Distributable cash flow is the important metric since mlps live and die by the payouts. And for that you want a dcf of around 1.2x the distribution or higher. anything under 1.0 is suspect and could be a sign of a stagnant a payout or (worse) a cut in the payout.