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.

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Comments (5)
  • dweiss60
    , contributor
    Comments (31) | Send Message
     
    Price target was actually cut to $15
    10 Feb 2014, 06:52 PM Reply Like
  • Maobama
    , contributor
    Comments (487) | Send Message
     
    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 2014, 07:39 PM Reply Like
  • Longfei13
    , contributor
    Comments (29) | Send Message
     
    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 2014, 09:21 PM Reply Like
  • justaminute
    , contributor
    Comments (1635) | Send Message
     
    Cramer is probably recommending this one.
    10 Feb 2014, 11:49 PM Reply Like
  • User 353732
    , contributor
    Comments (5161) | Send Message
     
    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 2014, 08:11 AM Reply Like
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