• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Energy

Smooth Pipeline Operators

These names have all sported solid technical strength of late.
By KATE STALTER Oct 03, 2012 | 02:00 PM EDT
Stocks quotes in this article: EPD, LNG, MPC, MRO, RRMS

The transport subsector of energy is one that I've followed closely this year. In this volatile equity market, many advisors seeking yield have steered clients into pipeline master limited partnerships (MLPs), many of which have shown decent year-to-date price appreciation.

Enterprise Products Partners (EPD) is up nearly 18% for 2012. The stock cleared a classic double-bottom base in July, and it has been trending along its 10-week line, forming a shallow consolidation below its July 20 all-time high of $54.98.

Not much has really changed on the chart since I last wrote about Enterprise. As far as its story is concerned, the Ohio-based company has slowed its pace of acquisition, and is focusing more on growing in-house projects. It has primarily been focused on the Midwest, but is currently expanding production capabilities in Texas. 

I recently joined advisory firm Portfolio, which counts Enterprise among its holdings.

When I last wrote about Enterprise, I also noted that shares of Cheniere Energy (LNG), a liquefied natural gas pipeline operator, were extended from a buy point. Indeed, the stock has provided a nice lesson on why it's often best to heed Axl Rose's timeless advice: Show a little patience.

Cheniere began pulling back on Sept. 17, essentially in tandem with the wider market, and has trended lower in a fairly orderly fashion. It rebounded quickly from a Sept. 26 gap lower, a move that also was in synch with a downdraft on the major indices.

Meanwhile, a pipeline operator that popped onto my scans this month was Marathon Petroleum (MPC). The company, itself spun off from Marathon Oil (MRO) in 2011, filed plans to spin off its MPLX pipeline unit (expected ticker: MPLX), which is structured as a limited partnership. Many analysts expect the deal will be done before the year is over.

Marathon Petroleum stock, meanwhile, is up 66% for the year, and is consolidating below its Sept. 14 high of $56.22. Technically the stock looks healthy, with support above key moving averages.

When it comes to earnings estimates, the picture is somewhat mixed.  The company is expected to earn $8.12 per share this year, and $7.47 in 2013 (after the expected initial public offering for MPLX). That would represent a decline of 8% from 2012 targets. In the most recent quarter, year-over-year revenue slipped 3% to $20.3 billion.

On Tuesday, news broke on company plans to shutter a crude unit at a Louisiana refinery in the fall of next year. However, the report was based on unattributed sources, and the company did not issue any statement confirming or denying the report.

Another newly public pipeline limited partnership, and one that's been a strong technical performer, is Rose Rock Midstream (RRMS). The small-cap name rallied to a high of $34.58 last week, and is holding nicely above its 10-week moving average.

The stock went public at $20 in December, and closed Tuesday at $32.81. Earnings are seen growing only 4% this year, to $1.41 per share. Next year, income is expected to rise 28% to $1.80 per share.  

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Portfolio, where Stalter serves as an investment advisor, was long EPD.

TAGS: Investing | U.S. Equity | Energy

More from Energy

Welcome to Second Semester on Wall Street, Here's How to Make the Grade

Jim Collins
Jul 1, 2022 4:36 PM EDT

Think you can own big tech? You might just get an 'F' for that. Here's what will get you on the other side of this year.

The Market, It's Such a Gas!

Helene Meisler
Jul 1, 2022 6:00 AM EDT

Commodities like gas came down and people finally noticed. Let's check on that diesel, 30-year bonds and more.

Want to Save Your Retirement Fund? Tune Out the Talking Heads

Jim Collins
Jun 30, 2022 3:14 PM EDT

The first half of this year has been ugly. But we could have seen what would happen to Netflix, Tesla and Meta...

OPEC+ Opens the Spigot, but Are We Just Repeating Mistakes of 2008?

Maleeha Bengali
Jun 30, 2022 12:26 PM EDT

As we see this increase in oil production get rubberstamped, we must remember that demand never moves in a straight line.

Commodity Bull Runs Have Proven Unsustainable; Can This Time Be Different?

Carley Garner
Jun 30, 2022 12:00 PM EDT

It's possible, but unlikely, as we've yet to see the commodity complex hold gains forged in a bull market.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:49 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Stop Wishing, Hoping, and Praying and Take Control...
  • 07:59 PM EDT PAUL PRICE

    Very Good Quarterly Numbers From Bassett Furniture (BSET)

    Bassett Furniture blew right through analysts es...
  • 04:41 PM EDT PAUL PRICE

    First-Half Results - Putrid; Second Half Results - Likely to Be Much Better

    It's great that we're done with June. 2022 mark...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login