2 MLP Turnaround Stories: Enbridge Energy Partners LP And NuStar GP Holdings LLC
- Bottom fishing in the MLP space can deliver differentiated returns. We prefer beaten-down names with a credible plan to restore the MLP's growth prospects.
- EEP has spun off its under-performing gas-related assets as MEP, providing a reliable source of low-cost capital to fund growth projects. ENB's restructuring of EEP's IDR also provides breathing room.
- ENB has also reiterated commitment to dropping down assets to EEP once the MLP's cost of capital improves; expect ENB to continue to pursue policies that drive EEP yield compression.
- NS management has divested underperforming assets and established impressive growth platform in Eagle Ford Shale. In Q2, NS covered distro for first time in almost 3 years.
- NSH offers leveraged exposure to NS' turnaround story.