Seeking Alpha
 

UBS ETRACS 1x Monthly Short Alerian MLP Infrastructure Total Return ETN (MLPS)

- NYSEARCA
  • Wed, Mar. 25, 11:36 AM
    | 20 Comments
  • Fri, Jan. 16, 6:55 PM
    • Miller Howard Investments veteran portfolio manager Roger Young has been buying energy stocks for 40 years, and he expects more bad news ahead for the sector but also sees certain MLPs providing long-term value to investors.
    • MLPs haven’t escaped the energy wreckage due to worries that lower oil prices will lead drillers to cut back on production, but Young sees MLPs as a way to invest without having to rely on “if you build it, they will come” business models popular elsewhere throughout the energy E&P and services groups.
    • With a backlog of projects just being completed or starting construction, all with contracts, “you would have growth of distributions for the next three years" even if no new projects were started, according to Young.
    • Among his favorite MLP investments: EPD, ETE, MMP.
    • ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, MLPN, EMLP, MLPG, MLPX, MLPS, MLPY, AMU, YMLI, ZMLP, AMZA, ENFR
    | 2 Comments
  • Thu, Jan. 15, 11:42 AM
    • A new report from J.P. Morgan’s energy team reminds investors that despite the Q4 meltdown from declining crude oil prices, MLPs still clawed out a 5% total return in 2014, far better than the -8% total return for the overall energy sector.
    • Still, the firm is sticking with top blue chip MLPs and defensive natural gas names, tabbing six Outperform-rated stocks that can stand some volatility as part of a growth and income portfolio: EPD, KMI, PAA, BWP, DM, EQM.
    • Others are more pessimistic on the group: S&P Capital IQ's Stewart Glickman says there isn't a single E&P MLP that has healthy fundamentals, though some companies such as PAA and RGP are now cheap enough to be potentially good deals.
    • Renaissance Capital's Nick Einhorn thinks a better alternative is to invest in funds that own groups of the MLPs.
    • ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, MLPN, EMLP, MLPG, MLPX, MLPS, MLPY, AMU, YMLI, ZMLP, AMZA, ENFR, ATMP, MLPC, MLPW, IMLP, OSMS, YGRO, MLPO
    | 13 Comments
  • Dec. 4, 2014, 5:40 PM
    • MLPs approach 2015 facing challenges including lower oil prices that could pressure smaller entities, but Wunderlich says North American E&P companies continue to become more efficient, balance sheets are generally in solid shape and capital remains available.
    • Wunderlich sees MLPs building on the uptick in M&A activity seen this year, with E&P-sponsored MLPs - particularly in the refining and downstream sectors - as acquirers, and the most sought-after targets those with access to waterborne and international markets (dock space, export terminals, pipeline connections to Mexico, etc.).
    • The firm prefers names that are substantially hedged, with EnLink Midstream (NYSE:ENLK), Western Gas Equity Partners (NYSE:WGP), Western Gas Partners (NYSE:WES) and DCP Midstream (NYSE:DPM) offering the most attractive total returns.
    • ETFs: AMLP, AMJ, MLPL, MLPI, MLPA, MLPN, EMLP, MLPG, MLPX, MLPS, MLPY, AMU, MLPJ, AMZA, ENFR, ATMP, MLPW, MLPC, IMLP
    | 2 Comments
  • Nov. 11, 2014, 3:21 PM
    • Prospects for energy MLPs remain bright despite lower crude oil prices, Credit Suisse’s John Edwards says, as Q3 distribution growth in the sector has averaged ~11% Y/Y and direct cash flow per unit rose 20% Y/Y on average.
    • The analyst says he saw little change in capex plans from energy MLPs in Q3 reports: Kinder Morgan (KMI, KMP) said it had seen no impact to business, Enterprise Products Partners (NYSE:EPD) continues to expect to invest $3.7B-$4.2B for 2015 and 2016 - the same as indicated before the oil price pullback - and Spectra Energy Partners (NYSE:SEP) remains on track in its drive to a $35B program.
    • Credit Suisse upgrades Midcoast Energy Partners (NYSE:MEP), ONEOK Partners (NYSE:OKS), Targa Resources Partners (NYSE:NGLS) and Western Gas Partners (NYSE:WES) to Outperform from Neutral, while reducing Magellan Midstream Partners (NYSE:MMP) to Neutral from Outperform.
    • ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, MLPN, EMLP, MLPG, MLPX, MLPS, MLPY
    | 7 Comments
  • Oct. 31, 2014, 6:50 PM
    • The recent wild behavior in the energy MLP sector - tumbling nearly 3x more than the S&P 500 during the first 10 trading days of October before rallying this week, with an assist from Shell Midstream Partners (NYSE:SHLX), which went public in a $1.1B offering and gained 46% - should not weaken the investment case for those who are choosy and hold for the long term, analysts say.
    • Investors worry that some E&P companies won’t be able to make money in a low oil price environment, and MLPs in the same business face tough times, but those upstream MLPs make up only ~5% of the total value of the sector, perhaps suggesting that the across-the-board decline was too extreme.
    • MLPs may remain expensive relative to their own history, but their average distribution of 5.5% in annual income - which should grow at ~7%/year in the next few years to 12%-plus - is plenty attractive relative to everything else.
    • To steer clear of the risk that lower energy prices will crimp profits, analysts advise concentrating on midstream operators; among the most stable are ETP, ETE, EQM, MMP, PAA, PAGP and SXL.
    • ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, MLPN, EMLP, MLPG, MLPX, MLPS, MLPY
    | 25 Comments
  • Oct. 15, 2014, 3:18 PM
    • MLPs have been crushed this week, and today Citi warns that the rapid drop in oil prices has created a "negative feedback loop on spending” and that a 15% drop in oil-directed drilling activity would result in a 50% drop in oil production growth.
    • It Brent oil prices stabilize at $85-$90, Citi thinks the MLPs exposed mostly to oil and natural gas liquids would rebound modestly as a new equilibrium is developed between producers and midstream companies on spending; if crude continues to slide, Citi says MLPs exposed to natural gas would outperform.
    • Miller Howard, a money manager specializing in income-producing stocks, is blaming newbie investors who don't fully understand MLPs and are "in it for the yield."
    • Most MLP contracts are very long term, meaning that a temporary change in the oil price has no effect on those sources of revenue, Howard says, adding that "there is far from enough infrastructure to serve the domestic energy industry, even if it slows a bit."
    • Some big MLPs have turned higher even as most stocks plunge: KMI +1.8%, KMP +1.5%, EPD +4.8%, PAA +3.7%, ETP +4%, ETE +8.6%, RGP +7.2%, CQP +6.6%, TEP +5.2%, PSXP +4.1%, MMP +7.1%, PAGP +4.9%, EEP +2.1%.
    • ETFs: AMLP, AMJ, MLPL, MLPI, MLPA, MLPN, EMLP, MLPX, MLPS, AMU, ENFR, ATMP, MLPW, AMZA, IMLP, OSMS
    | 15 Comments
  • Oct. 14, 2014, 12:33 PM
    • MLPs have been brutalized lately, with the benchmark Alerian MLP Index (AMJ +0.5%) plunging 13% in the past week and down another 3% earlier today, but at least some in the group have been trying to bounce back in the past hour or so.
    • J.P. Morgan strategists are sticking with their bullish central thesis on MLPs, saying prolific production from unconventional energy plays will keep demand high for new energy infrastructure; the firm believes most core acreage in leading shale plays continues to be economic at current commodity prices, which should drive strong long-term growth prospects for MLPs.
    • JPM favors MLPs owning high-quality, diversified assets with strong management teams and proven track records, naming Kinder Morgan (KMI -1.5%), Enterprise Products Partners (EPD +2.5%) and Plains All American Pipeline (PAA -1%).
    • ETP +3.7% and OKS +2.5%, LINE +1.4%, but EROC -5.3%, CQP -4.5%, BBEP -2.5%, MMP -2.5%, TEP -2.1%, PSXP -2%, WPZ -1.1%, ACMP -0.5%.
    • ETFs: AMLP, AMJ, MLPL, MLPI, MLPA, MLPN, EMLP, MLPX, MLPS, AMU, ENFR, ATMP, MLPW, IMLP, AMZA, OSMS
    | 8 Comments
  • Oct. 11, 2014, 8:25 AM
    • Energy MLPs have been subject to indiscriminate selling this week as crude oil prices plunge, and while RBC Capital analyst John Ragozzino would not step into the sector in a big way right now, he thinks investors already in the group should ride out the storm - depending on their oil price exposure.
    • Many energy MLPs, especially pipelines, are less correlated to commodity prices than other energy investments, but more MLPs with cyclical oil and gas price exposure are now part of the mix, and some investors have been selling without regard for the relative quality of specific stocks, Ragozzino says.
    • The analyst believes there is minimal risk to reduction in 2015 distributions; with commodity price hedging, he thinks MLPs on average will feel some pain, but can handle oil prices as low as $80/bbl.
    • Ragozzino says the MLPs most highly levered to a sustained drop in crude prices are MidCon Energy Partners (NASDAQ:MCEP), LRR Energy (NYSE:LRE) and Legacy Reserves (NASDAQ:LGCY); names least exposed include Atlas Resource Partners (NYSE:ARP), Vanguard Natural Resources (NASDAQ:VNR) and EV Energy Partners (NASDAQ:EVEP).
    • ETFs: AMLP, AMJ, MLPL, MLPI, MLPA, MLPN, EMLP, MLPX, MLPS, AMU, ENFR, ATMP, MLPW, IMLP
    | 16 Comments
  • Oct. 10, 2014, 10:55 AM
    | 36 Comments
  • Oct. 6, 2014, 1:20 PM
    • The InfraCap MLP ETF (NYSEARCA:AMZA) is the first actively-managed ETF offering pure master limited partnership (MLP) exposure.
    • Infrastructure Capital Advisors, an investment advisor specializing in energy, MLPs, and other key infrastructure sectors, debut ETF seeks capital appreciation, high current income and steady income growth through investments in high-quality, midstream energy MLPs.
    • "We believe that investing in companies with tangible assets that produce free cash flow creates stable, intrinsic value and is likely to produce reliable income to investors over time," said fund manager, Jay D. Hatfield, in a press release.
    • Other MLP ETFs: AMLP, AMJ, MLPL, MLPI, MLPA, MLPN, EMLP, MLPX, MLPS, AMU, ENFR, ATMP, MLPW, IMLP, OSMS
    | Comment!
  • Sep. 27, 2014, 9:15 AM
    • Worries that energy MLPs could struggle to produce gains this year have proven unfounded, as the group has produced double the return of the broader market so far this year and are yielding ~5.2%.
    • Distributions during Q2 rose 6.8%, growth that can compensate for price declines as other income investments with less risk attract investors.
    • Kinder Morgan's (KMI, KMP) consolidation is no longer seen as spelling the end of the MLP as a structure, and most analysts see continued robust growth and hefty valuations from the industry.
    • The Alerian MLP Index has returned 17% YTD vs. 12% for the Philadelphia Utilities Index components and 8% for the S&P 500; among individual MLPs, Emerge Energy (NYSE:EMES) leads the pack with a 267% return while the laggard is Oxford Resource Partners (NYSE:OXF) with a loss of 57.5%.
    • But the problem with MLPs is that the assets underlying them generally have a finite lifespan, and many have been bid up to very high prices; Enterprise Product Partners (NYSE:EPD), for example, is yielding just 3.8% and trading at 4.8x book value.
    • ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, MLPN, EMLP, MLPX, MLPG, MLPS, MLPY, AMU, YMLI, ZMLP, ENFR, ATMP, MLPW, MLPC, IMLP, OSMS
    | 26 Comments
  • Aug. 25, 2014, 2:17 PM
    • Other MLPs should gain as several billion dollars likely will rotate out of Kinder Morgan (KMI, KMP) thanks to various investors who prefer to remain invested in MLPs, which could bring a big boost to the rest of the asset class this year, Morgan Stanley says.
    • The tally of funds impacted by Kinder Morgan's decision to roll up all its MLP assets into a single non-MLP corporate parent and investors’ reactions to the move theoretically could run as high as $62B, the firm says.
    • Likely key beneficiaries include large-cap and higher-yield MLPs, the two primary investment styles displaced in investors’ portfolios by the transaction, Stanley says; the larger the potential rotation, the wider the benefits likely to be experienced.
    • ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, ENY, MLPN, MLPG, EMLP, MLPS, MLPX, MLPY, MLPJ, AMU, YMLI, ATMP, ZMLP, MLPW, IMLP, ENFR, MLPC
    | 33 Comments
  • Aug. 13, 2014, 2:56 PM
    • While Kinder Morgan's (KMI, KMP) decision to abandon the use of MLPs may have rattled some investors, it is unlikely that other MLPs will copy KMI's move, says Chris Eades, portfolio manager for energy MLP strategies at ClearBridge Investments.
    • "MLPs continue to be well positioned from a long-term growth perspective given all the growth we're seeing in the U.S. in energy production," Eades says.
    • As Kinder Moran MLPs were structured, incentive payments to the general partners were growing bigger and making equity more costly, but other MLPs haven't yet matured to this stage and some are structured differently; MLPs are "a long, long way off having to contend with the situation that Kinder found itself in," Eades says.
    • Greg Reid of Salient Partners agrees the deal is not a harbinger of the end of the structure, noting the Shell plans to spin off some of its portfolio into an MLP.
    • ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, ENY, MLPN, MLPG, EMLP, MLPS, MLPX, MLPY, MLPJ, AMU, YMLI, ATMP, ZMLP, MLPW, IMLP, ENFR, MLPC
    | 1 Comment
  • Aug. 12, 2014, 6:50 PM
    • In the wake of Kinder Morgan‘s absorption of its MLP subsidiaries, the Treasury Department has decided to look into the rise in MLP-related transactions and their effects on future tax revenues.
    • Daniel Clifton of Strategas Research is not impressed, citing Treasury’s recent "regulatory jawboning” about tax inversions and saying the agency has similarly flimsy regulatory authority over MLPs.
    • The IRS has been reviewing the MLP approval process since April after going through a similar review process for REITs in 2013 and concluding the approvals were in line with the law, and the same results were expected for MLPs; timed with the Kinder Morgan news, Strategas thinks Treasury is engaging in an "attempt to jawbone companies in the future from seeking MLP approvals."
    • ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, ENY, MLPN, MLPG, EMLP, MLPS, MLPX, MLPY, MLPJ, AMU, YMLI, ATMP, ZMLP, MLPW, IMLP, ENFR, MLPC
    | 1 Comment
  • Aug. 11, 2014, 7:15 PM
    • 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
    | 13 Comments
Visit Seeking Alpha's
MLPS vs. ETF Alternatives
MLPS Description
The UBS ETRACS 1xMonthly Short Alerian MLP Infrastructure Total Return Index is designed to provide a short exposure to the MLP Infrastructure market by tracking the inverse performance of the Alerian MLP Infrastructure Total Return Index, plus a fixed income return based on a hypothetical 91-day Treasury Bill portfolio, less investor fees. The Alerian MLP Infrastructure Total Return Index, comprised of 25 energy infrastructure Master Limited Partnerships, is a liquid, midstream-focused subset of the Alerian MLP Index (NYSE: AMZ). The Underlying Index, whose constituents generally earn the majority of their cash flow from the transportation and storage of energy commodities, provides investors with a benchmark for the infrastructure component of this emerging asset class. The Underlying Index is calculated using a capped, float-adjusted, capitalization-weighted methodology that results in greater diversification versus a pure market capitalization-weighted index.
See more details on sponsor's website
Country: United States
ETF Hub
Find the right ETFs for your portfolio: Visit Seeking Alpha's ETF Hub