Seeking Alpha

Wunderlich starts coverage of several lower-risk, high-yield MLPs

  • Energy analysts at Wunderlich feel more confident about upstream MLPs as 2013 rolls over, and the firm initiates coverage on some of the more conservative high-yielding names.
  • Breitburn Energy (BBEP), Legacy Reserves (LGCY) and QR Energy (QRE) are initiated at Buy, believing they are trading at a discount to peers despite increasingly liquids-rich portfolios and a long and successful acquisition track records.
  • Memorial Production Partners (MEMP) and Vanguard Natural Resources (VNR) also are started at Buy despite more gas-oriented portfolios.
  • EV Energy (EVEP) is initiated with a Hold rating, citing limited upside until it divests its planned Utica acreage; Atlas Resources Partners (ARP) also starts at Hold pending clearer visibility toward its debt metrics and coverage ratio improvement.
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Comments (3)
  • smurf
    , contributor
    Comments (4919) | Send Message
     
    I just don't understand the enthusiasm about VNR. Ok, so they hedge. But, they have a negative EPS of -$3+ and have posted losses for 5 years out of 7 reporting. Their D/E is 50% higher than their industry average. Their overall debt is staggering. This is a house of cards ready to collapse.

     

    No, I'm not short VNR, or any other stock. Not that it would matter anyway.
    24 Oct 2013, 11:16 AM Reply Like
  • Be Here Now
    , contributor
    Comments (5397) | Send Message
     
    smurf,

     

    Do you use FAST Graphs?
    24 Oct 2013, 12:17 PM Reply Like
  • judgmentDaze
    , contributor
    Comments (68) | Send Message
     
    In addition approx 45% of that VNR debt exposure is floating rate. If interest rates increased gradually it ought to lessen the risk for VNR and moderate the expected MLP performance headwinds overall. But gradual doesn't really describe the movement of interest rates during the "taper tantrum."
    28 Oct 2013, 01:58 AM Reply Like
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