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Citi names five core MLP holdings, upgrades two others to Buy

  • Citi analysts suggest five core holdings among MLPs and upgrade two other names to Buy, expecting growing U.S. hydrocarbon production that requires more infrastructure and improving prices for natural gas liquids.
  • Citi forecasts a 10% total return by the entire MLP sector during the next 12 months.
  • The firm's core recommendations: Williams Energy Partners (WPZ), Cheniere Energy Partners (CQP), Enterprise Product Partners (EPD), Northern Tier Energy Partners (NTI), Boardwalk Pipeline Partners (BWP).
  • Upgrades to Buy from Neutral: Tallgrass Energy Partners (TEP), El Paso Pipeline Partners (EPB).
  • Upgrades to Neutral from Sell: Niska Gas Storage (NKA), TC Pipelines (TCP).
  • Downgrades to Neutral from Buy: Genesis Energy (GEL), Rose Rock Midstream (RRMS).
  • ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, ENY, MLPN, MLPG, EMLP, MLPS, MLPX, MLPY, MLPJ, AMU, YMLI, ATMP, ZMLP, MLPW, IMLP, ENFR, MLPC
Comments (20)
  • memshu
    , contributor
    Comments (584) | Send Message
     
    Nit? Fk? Core holding? Fk?
    28 Mar, 07:08 PM Reply Like
  • chopchop0
    , contributor
    Comments (3547) | Send Message
     
    BWP? Seriously?
    28 Mar, 09:01 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (821) | Send Message
     
    ETE...ACMP..EQM...all better
    28 Mar, 10:18 PM Reply Like
  • memshu
    , contributor
    Comments (584) | Send Message
     
    Nti? ???? Core holding????? Fk?????
    Makes me wonder if I'm wrong with wpz!
    28 Mar, 11:51 PM Reply Like
  • Value Doc
    , contributor
    Comments (760) | Send Message
     
    Wow, outside of EPD, that is a very curious selection of "core holdings".

     

    I would choose the following:

     

    - EPD;
    - MMP;
    - PAA/PAGP;
    - KMR/KMI;
    - WMB/ACMP;
    - ETE/SXL;

     

    When I think of "core holdings", I think of minimizing risk (i.e. stuff with superior asset bases, balance sheets, scale, diversification, stability and high quality management). You can then speculate around the margins with riskier stuff, small-caps, etc. I'm not sure what Citi is thinking of here.

     

    Obviously, the big challenge for most of these is finding an opportune entry point, as such points don't come along too often.
    29 Mar, 12:41 AM Reply Like
  • aretailguy
    , contributor
    Comments (1196) | Send Message
     
    OILT, SXL, ACMP, ARLP, EQM, ETE, MMP all better. Perhaps Citi hasn't discovered Distribution Coverage Ratio. EPD is the only recommended stock that has merit. I'm glad Citi is not running my money.
    29 Mar, 12:43 AM Reply Like
  • 11146471
    , contributor
    Comments (842) | Send Message
     
    DCR you mention, changes overtime as revenues and profits grow overtime while dividend stays the same (or grows less).
    29 Mar, 04:34 AM Reply Like
  • wayla500
    , contributor
    Comments (17) | Send Message
     
    No wonder they failed the stress test.
    29 Mar, 02:20 AM Reply Like
  • miriam ledwith
    , contributor
    Comments (172) | Send Message
     
    Yup. What ARE they thinking? Long ETE.
    29 Mar, 07:23 AM Reply Like
  • koolsool
    , contributor
    Comments (325) | Send Message
     
    Analysts upgrade stocks they want to sell at a higher price.
    29 Mar, 09:08 AM Reply Like
  • Peteresmond
    , contributor
    Comments (111) | Send Message
     
    And down grade those they've already sold - oh wait, I meant "...their firms have already sold!"
    29 Mar, 03:49 PM Reply Like
  • Anasazi101
    , contributor
    Comments (800) | Send Message
     
    It's nice to have "core holdings" in probably MLPs and LPs...
    But I sometimes have to question, that many we see on here are investments in the Energy world or Oil patch...

     

    I believe in diversification, and think any long term investor should have core holdings in a few other Sectors to "weather any storms.."
    You may sacrifice 1%-2% in dividends and/or returns, or may actually have more growth...Counting appreciation and dividends as an unit.

     

    Although having 3-4 core holdings in Energy is contradictory to what I have just stated...We are invested in about 8-9 other Sectors, including "core holdings in at least 5 of them."
    Telcom, Tobacco, Healthcare(industrial/... Defense, Transportation and Precious Metals..
    So my point of having just core holdings in MLPs/LPs in the Energy world;
    Which many do because of "yield", should consider diversification in other sectors also...It is not accomplished overnight and takes time.
    Long, NTI, KMP, KMR, COP, and ARLP..
    29 Mar, 10:35 AM Reply Like
  • elivermore
    , contributor
    Comments (7) | Send Message
     
    I wonder why the kinder Morgan companies weren't on any of the lists? Is there a reason?
    30 Mar, 03:21 AM Reply Like
  • elivermore
    , contributor
    Comments (7) | Send Message
     
    I wonder why the kinder Morgan companies weren't on any of the lists? Is there a reason?
    30 Mar, 03:21 AM Reply Like
  • elivermore
    , contributor
    Comments (7) | Send Message
     
    Why are kinder Morgan companies not on any of the lists?
    30 Mar, 03:25 AM Reply Like
  • Anasazi101
    , contributor
    Comments (800) | Send Message
     
    eliverrmoree...Maybe just because of the Analysts doing the story or screening, decided against the KMs...

     

    Or maybe because of recent publicity they decided to shy away from the fray.

     

    Or thirdly these were upgrades and downgrades....If there has been "no change" on Kinder entities,(at their firm, Citi's) why waste the space on mentioning them?
    I wouldn't worry about what "only Citi" thinks.
    30 Mar, 09:36 AM Reply Like
  • Wally H
    , contributor
    Comments (25) | Send Message
     
    Something is wrong with this report. No way, no how could this list be thought of as "CORE HOLDINGS". again, something is amiss here.
    EWH
    30 Mar, 10:39 AM Reply Like
  • Be Here Now
    , contributor
    Comments (4407) | Send Message
     
    The source is Barron's. What can you expect?
    30 Mar, 11:45 AM Reply Like
  • Purple_K
    , contributor
    Comments (488) | Send Message
     
    I am completely inexperienced in MLP's, but I thought the reason you buy them was for the dividends, not capital gains. With that in mind, how would $BWP be a good core holding? The div was destroyed and will be so for the forseeable future. Unless you caught the absolute bottom, say, 12-12.5, you probably aren't looking at any meaningful capgain either. (Disclaimer - I bought way too early on the knife dropping, and am in around 14-ish)

     

    I don't mean it in a critical way, I'm just wondering if there's something I'm not seeing.
    30 Mar, 04:03 PM Reply Like
  • aretailguy
    , contributor
    Comments (1196) | Send Message
     
    Purple_K, The way I see it there are two reasons for MLP ownership, either dividends now or capital gains with growing dividends. I own ETP for current income. I bought ETE for what I thought would be an inflation beating, growing dividend stream. I am receiving the growing dividends but I also have received huge capital gains as well. Actually I see $BWP as being a very interesting MLP currently as it has VERY good distribution coverage AFTER the recent cut. I do not now own $BWP but am looking very hard at it.
    30 Mar, 08:40 PM Reply Like
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