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 treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Japanese Yen drops to fresh daily low; USD/JPY approaches 155.00 ahead of US PMIs
The Japanese Yen struggles to capitalize on stronger domestic inflation-inspired intraday uptick. The BoJ rate-hike uncertainty, the upbeat market mood and elevated US bond yields cap the JPY. The USD climbs to a fresh year-to-date high and offers additional support to the USD/JPY pair.
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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