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Hinds Howard
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I serve as the senior MLP research analyst for CBRE Clarion Securities, a global asset management firm based in Radnor, PA. My primary focus is on investing in Master Limited Partnerships (MLPs) within a larger infrastructure investment team.
My company:
Guzman Investment Strategies
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  • MLP Week Thoughts: Capital Markets Still Open, MLPs Load Up 0 comments
    Oct 9, 2011 11:37 AM | about stocks: KMI, MWE

    On Friday, amidst the Occupy Wall Streeters and Steve Jobs obituaries, something else flooded the streets: an excess of new MWE and RGP units… The MLP Index was down only 0.3% in a very volatile week.  3 of the 5 days saw moves of larger than 1.5%, and 4 out of 5 saw the index move more than 1%.  Monday, the MLP index dropped 2.4%, then Wednesday and Thursday it recovered, before dropping another 1.1% on Friday.  Friday’s action can be mostly attributed to the $427.5 million of new equity issued on Thursday night from Markwest (MWE – Press Release) and Regency (RGP – Press Release).  Both stocks struggled after pricing, although MWE held up better, closing only 1.4% below the price of the equity deal, and 4.4% below the previous close.  By comparison, RGP closed Friday 3.1% below pricing, and 6.4% below its previous closing price.

    I can’t remember another time when there were  2 follow-on equity deals launched on a Thursday afternoon.  Generally, Friday’s are more thinly traded and weaker than other days of the week, so you don’t usually want to expose your unit price to the selling pressure post offering on a Friday.  Monday afternoon through Wednesday afternoon are the preferred days of the week to issue equity, but clearly management teams are looking to take advantage of any strength in the market, and two straight +1.5% days in a row (Wednesday and Thursday), were clearly enough to make them pull the trigger.

    MLPs lagged broad equity indexes, which were all up this week on what appeared to be selling fatigue from a very challenging September.  Commodity prices recovered somewhat this week, treasury rates were up, and gold was up.

    The final results for the index this week (almost flat) are deceiving, as many of the smaller MLPs were off much more than the index would suggest.  The average price change for the 65 MLPs (not including GPs) that I track was -1.9%, which suggests that the larger and more heavily traded MLPs outperformed this week.  The top 5 largest MLPs wre up on average 0.89% for the week, led by $PAA (2.82%), $KMP(2.28%) and $EPD (1.87%).  Other strong performers this week included some of the previous week’s losers like coal names $OXF and $NRP.  RGP, as mentioned above, had a very rough week, down 9.5%, along with names that seem to be consistently on the red side of the below chart: $GLP and $CPLP.

    Click here to read the rest...

    Themes: MLPs, Investing for Income Stocks: KMI, MWE
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