11/19/15: Discarding the Jokers

By Igor Greenwald • November 19, 2015

MLP Profits has downgraded Aggressive recommendations SunEdison (NYSE: SUNE), Navios Maritime Partners (NYSE: NMM) and KKR (NYSE: KKR) to Sell, while upgrading to Buy Capital Products Partners (NASDAQ: CPLP) and Shell Midstream Partners (NYSE: SHLX).

For more on these and other portfolio changes, please see the November issue. For further color on SunEdison, please see this week’s MLP Investing Insider. 

MLP Profits Portfolio Update

  • KKR (NYSE: KKR) downgraded to Sell in Aggressive Portfolio
  • Navios Maritime Partners (NYSE: NMM) downgraded to Sell in Aggressive Portfolio
  • SunEdison (NYSE: SUNE) downgraded to Sell in Aggressive Portfolio
  • Capital Products Partners (NASDAQ: CPLP) upgraded to Buy below $7 in Aggressive Portfolio
  • Shell Midstream Partners (NYSE: SHLX) upgraded to Buy below $35 in Growth Portfolio
  • Global Partners (NYSE: GLP) downgraded to Hold in Growth Portfolio
  • Plains GP Holdings (NYSE: PAGP) downgraded to Hold in Growth Portfolio
  • Targa Resources Partners (NYSE: NGLS) downgraded to Hold in Growth Portfolio
  • TransCanada (NYSE: TRP) downgraded to Hold in Conservative Portfolio
  • UBS E-TRACS 2x Monthly Leveraged Long Alerian MLP Index (NYSE: MLPL) downgraded to Hold in Aggressive Portfolio
  • Archrock (NYSE: AROC) buy limit set at $15 in Growth Portfolio
  • Archrock Partners (NASDAQ: APLP) buy limit reduced to $25 in Growth Portfolio
  • Boardwalk Pipeline Partners (NYSE: BWP) buy limit reduced to $16 in Aggressive Portfolio
  • Buckeye Partners (NYSE: BPL) buy limit reduced to $70 in Aggressive Portfolio
  • Columbia Pipeline Group (NYSE: CPGX) buy limit reduced to $24 in Growth Portfolio
  • DCP Midstream Partners (NYSE: DPM) buy limit reduced to $33 in Growth Portfolio
  • Delek Logistics Partners (NYSE: DKL) buy limit reduced to $40 in Growth Portfolio
  • Energy Transfer Equity (NYSE: ETE) buy limit reduced to $27 in Growth Portfolio
  • Energy Transfer Partners (NYSE: ETP) buy limit reduced to $48 in Growth Portfolio
  • EnLink Midstream (NYSE: ENLC) buy limit reduced to $24 in Aggressive Portfolio
  • Enterprise Products Partners (NYSE: EPD) buy limit reduced to $34 in Conservative Portfolio
  • EQT (NYSE: EQT) buy limit reduced to $85 in Aggressive Portfolio
  • EQT GP Holdings (NYSE: EQGP) buy limit reduced to $29 in Aggressive Portfolio
  • New Residential Investment (NYSE: NRZ) buy limit reduced to $15 in Aggressive Portfolio
  • NuStar Energy (NYSE: NS) buy limit reduced to $46 in Growth Portfolio
  • NuStar GP Holdings (NYSE: NSH) buy limit reduced to $27 in Growth Portfolio
  • Plains All American Pipeline (NYSE: PAA) buy limit reduced to $26 in Conservative Portfolio
  • SemGroup (NYSE: SEMG) buy limit reduced to $45 in Growth Portfolio
  • Spectra Energy (NYSE: SE) buy limit reduced to $32 in Conservative Portfolio
  • Spectra Energy Partners (NYSE: SEP) buy limit reduced to $57 in Conservative Portfolio
  • Sunoco Logistics Partners (NYSE: SXL) buy limit reduced to $36 in Growth Portfolio
  • Targa Resources (NYSE: TRGP) buy limit reduced to $50 in Growth Portfolio
  • Williams (NYSE: WMB) buy limit reduced to $45 in Growth Portfolio

 

Stock Talk

Comments Guidelines
Guest User

Guest User

Igor: I don’t clearly understand the recent postings on UBS E-Tracs 2x linked to the Alerian MLP index and the discussion about Fidelity declining to fill new buy orders and UBS having to increase the size of the underlying pool of units linked to the UBS note. Has the correlation, or the attempted correlation, between the index and MLPL been broken. I understand the correlation was never perfect, point for 2x point. If UBS decides to discontinue or redeem the Exchange Traded Note, is there a formula for the price or prices at which a redemption would be done? Thank you.

Guest User

Guest User

Fidelity has since reversed their decision because they didn’t fully understand the situation.

Igor Greenwald

Igor Greenwald

There is, and it’s described in full staring on p. 55 of the latest prospectus: http://etracs.ubs.com/docs/ussymbol/MLPL/prospectus-supplement
To summarize, UBS can redeem with advance notice at any time and the ETN will also close out if its indicative value falls below $5 per share or is down 30% or more for the month at any point. At redemption, you’d be entitled to indicative value of the ETN plus any unpaid coupon, all net of the usual tracking and financing fees. Right now the indicative value (^MLPL-IV on Yahoo Finance) is roughly 1% below the MLPL price, but with issuance suspended the premium would almost certainly increase on any meanigful rally. That wouldn’t be a bad thing in the short term, of course. We should get so lucky.

Guest User

Guest User

Also, Igor, regarding my question below, I fully understand you are not psychic and you provide what you believe are your best opinions, based upon available information. I have read some nasty comments directed at you due to price declines, which I feel are misplaced. Your insight is always appreciated, and I find your analyses to be well reasoned and presented.

Igor Greenwald

Igor Greenwald

I really apppreciate this. Thanks so much for reading.

Al B

Al B

Igor, the gas for cars using natural gas-not oil is for all current car engines. this is not natural gas converted to liquid natural gas for shipment in tankers. Land is supposedly being cleared now in the SE to build the plant and up and going by 2017. also heard cost to produce was .23 cents per gallon. I have not heard another word about this which is hard to believe IF it is true.

Igor Greenwald

Igor Greenwald

I’m not sure which project you’re referring to, unfortunately. South Africa’s Sasol delayed a big plant it still hopes to build one day in Louisiana back in January and Shell canceled plans for a another refinery-scale gas-to-liquids plant two years ago, but several small-scale projects are proceeding. At the current oil-to-gas price ratio such production should certainly be attractive, but the problem with the larger projects is that they require big up front investments with no way to fully hedge the risk of less favorable commodity pricing over the plant’s life span.

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