Seeking Alpha

Boardwalk woes don't spill over into other oil and gas MLPs

  • Today was a disaster for Boardwalk Pipeline Partners (BWP), -46% on the day after cutting its distribution by more than 80%; the good news is that Wall Street does not seem too concerned about a spillover into peers and competitors, at least not yet.
  • Most of the high-yield MLPs held up well, though one exception was El Paso Pipeline Partners (EPB), whose emphasis in natural gas pipelines and terminating caused it to slide in sympathy with BWP.
  • In its downgrade to Underperform from Neutral with a reduced price target of $20/unit, Credit Suisse says the MLP's assets are primarily located along Gulf Coast regions where drilling activity and production have been in decline due to lower natural gas prices; storage margins also have dropped due to tighter differentials across natural gas trading hubs.
  • ETFs: AMJ, AMLP, KYN.
Comments (5)
  • Price target was actually cut to $15
    10 Feb, 06:52 PM Reply Like
  • Wow a 2.66% yield (at 15) on an MLP that will not raise distributions for at least two years. Avoid this one until there is a change in senior management.
    10 Feb, 07:39 PM Reply Like
  • Boardwalk's woes had less to do with gas prices than bad business decisions and just bad luck in timing of their contracts.
    10 Feb, 09:21 PM Reply Like
  • Cramer is probably recommending this one.
    10 Feb, 11:49 PM Reply Like
  • MLPs differ greatly in terms of business model, strategy, financial depth and management competence; just as E&P companies do. Luck, as ever, is a factor for both businesses and investors
    Several MLPS are bound to deeply disappoint as will several E&P companies but the industry has not ,is not and will not disappoint :nor will MLPs and E&P companies as a class.
    EPB now seems undervalued.
    11 Feb, 08:11 AM Reply Like
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