Cramer eyes three consolidation candidates in transformed MLP landscape


As Rich Kinder abandons the MLP structure he helped popularize, CNBC's Jim Cramer feels confident that rivals are taking notice, thus investors should expect many more deals in the energy MLP space.

Cramer tabs three MLPs he thinks could end up in play: Enterprise Products Partners (NYSE:EPD), the entity that received gained permission to export condensate in "a huge game-changer"; Energy Transfer Equity (NYSE:ETE), whose cash flows should "explode higher" and its payout increase dramatically once temporarily relinquished incentive distribution rights are reinstated, which should happen next year; and Atlas Energy (NYSE:ATLS), a relatively cheap stock which should be able to raise its distribution dramatically for the next few years.

BofA/Merrill Lynch also thinks the deal may be a harbinger of what’s to come for other MLPs that grow too big: "While we do not see other GP-buying-LP transactions occurring yet, we also think it provides a template for a somewhat graceful exit from a structure that can prove long-term unwieldy as an MLP grows... [We] expect significant interest in potential MLP consolidation candidates."

ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, ENY, MLPN, MLPG, EMLP, MLPS, MLPX, MLPY, MLPJ, AMU, YMLI, ATMP, ZMLP, MLPW, IMLP, ENFR, MLPC

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Comments (13)
  • mydogmoe
    , contributor
    Comments (1300) | Send Message
     
    Even a blind squirrel finds a nut every now and then. The Kinder deal is the first and there will be others.....
    11 Aug 2014, 07:21 PM Reply Like
  • jumpnjoey77
    , contributor
    Comments (1116) | Send Message
     
    Cramer his 10 stocks for the next century all went bankrupt.
    11 Aug 2014, 08:13 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (6572) | Send Message
     
    I'm long (NYSE:CVRR), but I like (NYSE:ATLS).
    11 Aug 2014, 08:15 PM Reply Like
  • dectra
    , contributor
    Comments (649) | Send Message
     
    The 9 missed earnings reports by ATLS over the last few years is too much of a hurdle for me to bite Atlas. I'll stick with EPD, even with the higher price. It's the little train that just keeps chugging along....
    13 Aug 2014, 08:15 AM Reply Like
  • CapeCapMgmt
    , contributor
    Comments (1768) | Send Message
     
    You guys/gals need to take heed and listen to Cramer because he has forgotten more than many of you will ever know about how the market works. I would invite you to read his books and listen to his show with an open mind. You might just learn something. I am not recommending that you go out and BUY BUY BUY, or SELL SELL SELL every time Cramer opens his mouth, (Hopefully you're doing your own due diligence)...Cramer is a trader by heart, but he knows how to value a company and can go fundamental in a heartbeat. As mentioned previously, JC ran a very successful hedge fund in the past where he had to answer to high roller investors on a daily, (no, a hourly basis), therefore he has that trader mentality. But don't let him fool you. He is very intelligent and knows the game, (as well as basic long term investing fundamentals when he wishes to disclose)...
    11 Aug 2014, 08:58 PM Reply Like
  • juscallmej
    , contributor
    Comments (80) | Send Message
     
    too much common sense in this post.

     

    agreed.
    11 Aug 2014, 11:25 PM Reply Like
  • oagfy
    , contributor
    Comments (223) | Send Message
     
    I think some of the ETFs mentioned are actually ETNs (i.e., notes), which is sort of a different animal.
    11 Aug 2014, 10:36 PM Reply Like
  • Arthur Cutton
    , contributor
    Comments (263) | Send Message
     
    Yeah, Cramer the energy genius who hyped us all on SD. Now he picks ATLS. Funny. It was the ATLS morons named Cohen that hyped Leon Cooperdope up on SD. Claimed they were giving him the inside skinny on SD volumes. Spare us. Please.
    11 Aug 2014, 10:38 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2856) | Send Message
     
    EPD waaay too big to be in play, unless management does it via a LBO. Look for smaller names.
    11 Aug 2014, 11:43 PM Reply Like
  • dectra
    , contributor
    Comments (649) | Send Message
     
    Mike

     

    Even if EPD is not "in play" it's still a great stock with a fat little dividend.
    13 Aug 2014, 08:16 AM Reply Like
  • Mike Maher
    , contributor
    Comments (2856) | Send Message
     
    I've owned EPD for 5 or 6 years now, I personally think that either they need to increase the dividend much quicker, or its very over-valued. Not selling because of the tax implications, but I dont think the yield should be under 4%
    13 Aug 2014, 11:58 AM Reply Like
  • stary kozel
    , contributor
    Comments (195) | Send Message
     
    I did not see (yet) anybody to mention the impact of Kinder "consolidation" on all the ETNs that are made-up from Alerian (etc.) indexes. I am not sure about Cushing. All 3 Kinder MLPs are going to disappear from the index, because they will be included in the KMI which is not a MLP. Therefore, i assume that people who jumped yesterday into all the MLP Notes (MLPL, etc) will lose a lot of money, because the Index valuations will go down. Or not? I do not have any idea how this will be handled.

     

    For example, KMP makes up 9.24% of MLPL content. AMU has KMP in it at 9.95%

     

    The background is really well explained here:
    http://yhoo.it/1sNg84T
    12 Aug 2014, 10:27 AM Reply Like
  • puffperney
    , contributor
    Comments (9) | Send Message
     
    I think many of us do not question Cramer's "savvy", but, he is a TV Personality now and seems compelled to jump on whatever is popping out there at any one time. He has a lot of time to fill and is required to hold forth on any and all events in the stock world.
    12 Aug 2014, 11:00 AM Reply Like
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