Sébastien Bischeri
Sunshine Profits
Let’s focus on less-popular securities to trade energies today: Master Limited Partnership (MLP). How do they work and how can they be profitable?
By the way, a big “thank you!” goes to Simon, one of our readers, who asked us about this last Friday. Feel free to send us your questions or any topics that you would like us to write about in the forthcoming editions, and we’ll try our best to answer them!
Note: Trading positions are available to our premium subscribers.
A good way to diversify the construction of your oil and gas investment portfolio is to use a variety of assets for balanced exposure to the energy sector and its industrial components.
What is a Master Limited Partnership (MLP)?
To learn in detail what a MLP is, we invite you to read the following articles that already contain the necessary basic information you need to know before starting investing in them.
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Master Limited Partnership (MLP), Investopedia.com.
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The Benefits of Master Limited Partnerships, Investopedia.com.
Key reason for going into those alternative investments
The most important advantage is the high-income potential. Indeed, Master Limited Partnerships (MLPs) typically pay high yields to investors, mainly due to the fact that they do not pay corporate income taxes.
Stock watchlist (Continued)
In the first article about alternative investments, we started a watchlist with some major energy stocks. Today, let’s update it!
As usual, our stock-picks will be shared through this link to our dynamic watchlist (which will be included in the position from now on). It will be updated from time to time as we progress through our portfolio construction process.
Take a look below at a few examples of some indicative metrics:
Today we picked five oil and gas Master Limited Partnership (MLP) companies that are quoted on the US exchange. Their revenues are as stated below:
Revenue (in billion US dollars):
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Enterprise Products Partners LP (EPD) $26.67B.
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Energy Transfer LP (ET) $38.95B.
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Magellan Midstream Partners LP (MMP) $2.37B.
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MPLX LP (MPLX) $8.51B.
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Plains All American Pipeline LP (PAA) $23.59B.
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All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' employees and associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Editors’ Picks
EUR/USD struggles for direction amid USD gains
EUR/USD is trimming part of its earlier gains, coming under some mild downside pressure near 1.1730 as the US Dollar edges higher. Markets are still digesting the Fed’s latest rate decision, while also looking ahead to more commentary from Fed officials in the sessions ahead.
GBP/USD drops to daily lows near 1.3360
Disappointing UK data weighed on the Sterling towards the end of the week, triggering a pullback in GBP/USD to fresh daily lows near 1.3360. Looking ahead, the next key event across the Channel is the BoE meeting on December 18.
USD/JPY weakens below 156.00 amid Fed rate cut outlook, BoJ rate hike anticipation
The USD/JPY pair trades on a negative note near 155.75 during the early Asian session on Monday. The US Dollar softens against the Japanese Yen amid the prospect of interest rate cuts by the US Federal Reserve next year.
Editors’ Picks
When are the China Retail Sales, Industrial Production and how could they affect AUD/USD?
The National Bureau of Statistics of China will publish its data for November at 02.00 GMT. AUD/USD trades on a positive note on the day in the lead up to the China Retail Sales, Industrial Production data. The pair gains ground as US Dollar softens amid the prospect of interest rate cuts by the US Federal Reserve next year.
USD/JPY weakens below 156.00 amid Fed rate cut outlook, BoJ rate hike anticipation
The USD/JPY pair trades on a negative note near 155.75 during the early Asian session on Monday. The US Dollar softens against the Japanese Yen amid the prospect of interest rate cuts by the US Federal Reserve next year.
Gold holds steady above $4,300 amid supportive fundamental backdrop
Gold kicks off the new week on a slightly positive note following Friday's late pullback from levels just above mid-$4,300s or the highest since October 21. Bets for two more rate cuts by the US Fed next year continue to act as a tailwind for the non-yielding bullion. Apart from this, a softer risk tone and geopolitical uncertainties benefit the safe-haven precious metal. However, a modest US Dollar uptick might cap gains ahead of the delayed US NFP report on Tuesday.
Week ahead: US NFP and CPI, BoE, ECB and BoJ mark a busy week
After Fed decision, dollar traders lock gaze on NFP and CPI data. Will the BoE deliver a dovish interest rate cut? ECB expected to reiterate “good place” mantra. Will a BoJ rate hike help the yen recover some of its massive losses?
Big week ends with big doubts
The S&P 500 continued to push higher yesterday as the US 2-year yield wavered around the 3.50% mark following a Federal Reserve (Fed) rate cut earlier this week that was ultimately perceived as not that hawkish after all. The cut is especially boosting the non-tech pockets of the market.
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