As MLP glow fades a bit, Merrill offers four favorites, three new Buys

Emerging Wall Street consensus is that the MLP sector may have seen its best days, and the MLP analyst team at Merrill Lynch cautions in a new report that volatility may lurk in the sector.

While Merrill believes the triple threat of increasing interest rates, volatile commodity pricing and overall MLP equity supply may combine to produce a choppy year, the firm upgrades three top names to buy to add to four top picks for 2014.

The top four: Energy Transfer Partners (ETP), whose distributable cash flow as of Sept. 30 totaled $2.3B vs. $1.3B a year earlier; MarkWest Energy (MWE), who will be able to process 3.7B cf/day in the Marcellus shale within a few years; Plains All American (PAA), a top name to buy at most Wall Street firms; and Western Refining Logistics (WNRL), which has not yet paid a distribution.

Upgraded to Buy: GLP, MMLP, TLLP.


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Comments (10)
  • Transcripts&10-K's
    , contributor
    Comments (1219) | Send Message
    "The top four: Energy Transfer Partners (ETP), whose distributable cash flow as of Sept. 30 totaled $2.3B vs. $1.3B a year earlier"


    How convenient - don't bother discussing the massive increase in units over that same period; meanwhile the number of units outstanding has increased by more than 50% in the past year. Keep up the great work ML!
    7 Jan 2014, 07:15 PM Reply Like
  • lsuavecito
    , contributor
    Comments (2577) | Send Message
    Yep, and how about the distro that was stagnant for 5 years. When will ETP begin to reap some of the benefits from the SXL acquisition? ETE was the place to be over the past few years….U know, with the Honchos.
    7 Jan 2014, 09:43 PM Reply Like
  • reader
    , contributor
    Comments (326) | Send Message
    Does ML explain the "best days" or "Volatility may lurk in the sector" comments? I am of the opinion that, after all these years of investing, I am the best judge of where I should invest. I also believe that the "new energy", as I call it, is really in the the early stages and not past its best days as ML may have you believe. I'll do my own dd and go down with my own ship or sail into the sunset under my own flag.
    7 Jan 2014, 09:03 PM Reply Like
  • sinedo
    , contributor
    Comments (501) | Send Message
    ML has a history of saying Sell when they are ready to load-up on a stock, and when they said Buy, I realized they wanted to unload their holdings. I have watched them for over 25 years, checking recommendation against charts, and it is obvious that they are the best contrary indicator there can possibly be. No firm can be so incredibly wrong, unless they are intentionally trying to influence the idiots they advise. You can find their recommendations on-line and you will see they say Buy at the top and say Sell near the bottoms. Why the pattern?
    They usually work to hold a stock down while accumulating, and buy a little to keep the price up there as they gradually dump their holding. I thought they might have reformed after Bank of America took them over, but now I'm convinced they haven't changed their stripes. I'd be the first to say there are no "sure things" in the Market, but doing the opposite of what ML says is the closest thing to one. You can bet on it, safely, IMO.
    There are few MLP's that are over-valued by the Market, now, so load-up and make ML pay-up for the shares they want. They'll be working to keep prices down, so take advantage of a "gift".
    7 Jan 2014, 10:41 PM Reply Like
  • User 195396
    , contributor
    Comments (447) | Send Message
    Sounds like you are describing Goldman-heh;
    I agree but I believe that the Wall Street firms all march to the same drummer, take care of the big clients and screw the average retail investor-the big guys, hedge funds, institutions, pension funds, etc.
    It is not a level playing field and anyone who does his own DD is miles ahead of the average guy who responds to the recommendations of Street crowd-whatever happened to Abby Jo Cohen, I think she is still with Goldman-terrific contrary indicator during the dot com bubble and crash.
    7 Jan 2014, 11:54 PM Reply Like
  • surfgeezer
    , contributor
    Comments (10330) | Send Message
    Hoping they are right on the volatility, loving the Option Premiums. Huge chunk of my Taxable Income comes from this sector, and plan on increasing it.
    7 Jan 2014, 09:50 PM Reply Like
  • philgallo
    , contributor
    Comment (1) | Send Message
    Could not agree more. Checkout KMP if do not hold it---priced right
    8 Jan 2014, 05:24 PM Reply Like
  • harv3
    , contributor
    Comments (176) | Send Message
    The crooked manipulations of full service brokers are just one good reason why even well informed individual investors get blilndsided.
    Therefore, better to buy a number of well managed, mutual funds in various market sectors: large cap, small cap, value, growth etc. And, don't just buy one fund in each of those sectors- even the best can have a bad year; instead, buy at least 5-10 of the best funds you can find, with trusted management, so in case one of those funds unexpectedly underperforms in a given year, the others may mitigate.
    Some of my longs I am very comfortable with, and overweight; SEQUX AKREX PRMTX PLCSX OAKMX PIXDX OAKLX SAGCX POAGX PRWCX BCSIX PRNHX SKSEX.
    All are long term peer-beaters. Some may be closed to new investors via discount brokers, but may be open for direct purchase from the fund itself.
    8 Jan 2014, 12:59 AM Reply Like
  • max600cash
    , contributor
    Comment (1) | Send Message
    When ML speaks it is like Clinton addressing extra marital flings.
    8 Jan 2014, 01:11 AM Reply Like
  • sitting bull
    , contributor
    Comments (5) | Send Message
    ML, if it smells and looks like a pig it is a pig.....started accumulating MLP shares 8 years ago and has been one of my best performing sectors...... 2 years ago they started say buy buy it is sell sell.....will enjoy the dividends in retirement....
    8 Jan 2014, 01:29 AM Reply Like
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