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Among energy companies tracked by 24/7, the sharpest increases in short interest came in top...

Among energy companies tracked by 24/7, the sharpest increases in short interest came in top pipeline MLPs Kinder Morgan (KMP) and Enterprise (EPD). With the pipeline partnerships’ business model a proven winner, the increase in short interest looks like a bet against the pipeline companies based on debt levels and shrinking cash flows as demand slackens.
Comments (11)
  • Keep in mind that short interest only rose to a negligible 0.4% of EPD's float.
    12 Dec 2012, 10:39 AM Reply Like
  • Shorts arent going to stay short securities with high yields, especially yields that rise each quarter.
    12 Dec 2012, 10:43 AM Reply Like
  • May have MLP tax changes in mind - not a good bet to me.
    12 Dec 2012, 10:55 AM Reply Like
  • Aren't the shorts responsible for paying out the distrbutions on the shares they've borrowed?

     

    Seems like a suckers bet to me. I am buying these names into weakness. Recently added EPD at 51, will buy more if it gets below 48 again
    12 Dec 2012, 11:01 AM Reply Like
  • what does this have to do with COP, CVX? Curious. Or am I missing something.
    12 Dec 2012, 11:22 AM Reply Like
  • Must be cross threaded...
    12 Dec 2012, 02:18 PM Reply Like
  • The other day a press wire came across " International banks will have a short fall of 618,000 billion dollars' I thought to myself " Great more problems for BAC", It was trading around that 9.90 level. but the market was definitely on the uptick and then broke to the upside big to up 125 on the dow and the international banks shot up strongly, WHAT I said. Then more press news" Dodd and Frank bill relaxed, Volcker rule pushed till the end of 2013" Then " 40 republican's go to Obama". That came out at 11.30. Some one before we knew. Yes price action matters, but who knew about these government moves before us? It seems self apparent. If these officials are placing bets on the January decision of the EPA's ruling on fracking just to line their pockets again, which they still can, then their cash should be put in escrow. I do believe the EPA will be smart and work with these companies so that they can continue working in the U.S.A. cost effectively. Shell is moving their headquarters to China. Maybe politics should be viewed as a whole as a calling. Still long BHI.
    12 Dec 2012, 12:30 PM Reply Like
  • KMP and EPD are about as safe as it gets in the MLP space. Compare their yields with others (read: riskier) that are double 5%, but are only a few years old and still spec in many ways.
    12 Dec 2012, 02:11 PM Reply Like
  • On 12/11 KMP announced a secondary offering of 3.9 million units at $78.60. As I write this 12/12 3:14 PM the units are trading at $78.61. In late October the units traded around $86 and since have headed straight down.

     

    Major change.

     

    Insider trading anyone?
    12 Dec 2012, 03:17 PM Reply Like
  • If you were to do a technical analysis of KMP's unit price, you would find that what you described is perhaps a resistance level at the $86 level.

     

    Of course, there have been other events at play. Namely, a sell-off in numerous MLPs since the November elections. This sell-off was caused by many thinking there would be substantive changes in MLPs preferential tax treatment. As it turns out, this is looking like no dice.

     

    Additionally, when a company sells 3.9 million units, perhaps there is at least a touch of dilution.

     

    Your thoughts, Bobco23?
    12 Dec 2012, 05:36 PM Reply Like
  • You make good points. Perhaps I am just too suspicious.
    14 Dec 2012, 12:03 AM Reply Like
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