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If you harbor doubts about the sharp rise of energy MLPs, you don’t have many short...

If you harbor doubts about the sharp rise of energy MLPs, you don’t have many short sellers on your side. Fewer than 1% of the shares of MLP constituents of the Alerian index (AMJ) are out on loan. Low short interest may have less to do with a lack of negative opinion than with the nature of who owns MLPs, but it’s a notable feature since it should mean a classic short squeeze isn’t possible.
Comments (7)
  • TruffelPig
    , contributor
    Comments (4083) | Send Message
     
    Pretty expensive top short MLPs......you have to pay the distribution/dividend every 3 month.
    21 May 2013, 06:41 PM Reply Like
  • bsorge
    , contributor
    Comments (718) | Send Message
     
    Most of the MLP owners are buy and hold due to the tax consequences of selling which grows every year of ownership.
    From my prospective this would make these investments less prone to market corrections. Almost recession resistant.
    21 May 2013, 06:51 PM Reply Like
  • Ajayyy
    , contributor
    Comments (317) | Send Message
     
    Tax is a friction. Sadly, it is also a real-world constant.
    21 May 2013, 07:00 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2542) | Send Message
     
    That article says a "short squeeze isnt possible", but most of these names are at multi-year, if not all time highs. MLPs have high yields and tax consequences for trading them, as Truffel and bsorge mention, so of course they arent going to function like high beta stocks.
    21 May 2013, 09:10 PM Reply Like
  • bsorge
    , contributor
    Comments (718) | Send Message
     
    Not all are at their highs. Example OKS. Many others.
    22 May 2013, 09:14 AM Reply Like
  • Mike Maher
    , contributor
    Comments (2542) | Send Message
     
    EPD, KMP, MWE, PAA, ETP, ETE, MMP all larger than OKS and all either at or within 5% of their highs. OKS is the exception in the pipeline space, not the rule. The variable MLPs are more based on individual industries, so those don't really count, IMO.
    22 May 2013, 06:06 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2542) | Send Message
     
    Also, OKE just said they'll growth payments 50% in the next few years, on growing payments from OKS...those GP distribution rights really add up.
    22 May 2013, 06:17 PM Reply Like
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