Master Limited Partnerships Annilated – AGAIN

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Flipping to our MLP page this afternoon we were absolutely shocked to see the level of RED on the page–not just red, but hugely negative numbers (as measured in percentage–of course from current level a few cents sometimes makes for a huge percentage loss).

60% of the issues were down MORE THAN 5% today!!! Bunches were down by more than 10%.  This all on a day when energy prices were up.

Unfortunately our NGL Energy (ticker:NGL) has performed poorly (understatement).  While the company has had stellar financials and we expect them to continue to do ok, there seems to be a perception that they are a propane company which they really are not. Retail propane is a very tiny part of the business–I’m talking 1%.  The balance being in the midstream arena of storage and pipelines of crude and refined products.  We will continue to hold as a small part of a larger diversified portfolio.


For all of those contemplating purchasing in the MLP area we would hold off.  We are going to have bunches (maybe dozens) of bankruptcies in the sector in the next 1-2 years if energy prices remain low.  There will be great speculative profits made when the dust settles, but we are not speculators so likely will not participate unless it is an issue with a nice, safe distribution.


Tim McPartland

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Tim McPartland
Tim McPartland is a private investor with over 45 years of investing experience. His analysis, research and writing is devoted to the hunt for income producing securities of all types, but in particular specializing in preferred stocks, exchange traded debt and Master Limited Partnerships.
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