Being an investor in the sector of master limited partnerships, or MLPs, has been extremely rewarding for years and years. Suffice it to say that the last drop in oil to under $85 sent many investors running for cover. If drilling projects were on the verge of becoming unprofitable, then the ramifications could be that the oil and gas business would slow down enough that the pipelines and terminals might start to see a slowdown. After having been battered, this sector has recovered from a handy sell-off on Tuesday that was off of new year lows.
The question to ask is whether this marked the bottom in the MLP sector. Please note: we have updated the prices on each at the end.
For whatever this is worth, we outlined what the 10% correction would have to be on Monday. That sort of correction is long overdue. It may even still happen, and some investors should hope that a 10% correction will occur. Still, after a massive volatility spike and subsequent market tank in recent days, we wanted to show the key MLP ETFs and funds for how bad the carnage has been. As a reminder, distributions for MLPs are not straight dividends. They include a return of capital on top of income.
UPDATE: Unfortunately, Tuesday’s NYMEX crude settled down 4.6% at $81.84 on Tuesday. That isn’t going to be a great factor for support. MLP closing prices below were given an updates for the close.
JPMorgan Alerian MLP ETN (NYSEMKT: AMJ) was down as low as $43.45 on Tuesday, but shares were last seen down only 0.5% at $46.05. Its 52-week range is $43.25 to $54.13, and the volume in mid-afternoon was already about four times normal at 4.5 million shares. Update: This MLP ETF was down 18 cents, or 0.4%, to $46.10 on 4.9 million shares at 2:50 p.m.
Alerian MLP ETF (NYSEMKT: AMLP) was down as low as $16.62 for a new year low earlier on Tuesday, but shares were last seen up 11 cents at $17.43. This ETF’s 52-week range is $16.63 to $19.35, and the volume in mid-afternoon was already about four times normal at 12.7 million shares. Update: The Alerian MLP ETF was still up 15 cents to $17.45, on 13.4 million shares, as of 2:50 p.m. Eastern Time.
Kayne Anderson MLP Investment Co. (NYSE: KYN) is a closed-end fund tracking MLPs. Its stock hit a low of $35.40 on Tuesday, but the fund was last seen down 44 cents at $36.10, against a 52-week range of $34.50 to $41.35, and the volume in mid-afternoon was 675,000, versus average daily volume of about 235,000. Update: The Kayne Anderson price was down 0.8% to $36.24 as of 2:50 p.m. Eastern Time.
The ClearBridge Energy MLP Total Return Fund (NYSE: CTR) was down as low as $19.15 on Tuesday, but its shares were down only 17 cents at $19.97 on last look, against a 52-week range of $19.15 to $24.25, and the volume was about three times normal at 342,000 shares. Update: The ClearBridge price was down 1.2%, at $19.90, as of 2:50 p.m. Eastern Time.
Enterprise Products Partners L.P. (NYSE: EPD), the largest MLP, was last seen up 1.5% at $34.56. That is after hitting a low of $31.68 Tuesday morning. Keep in mind that Enterprise has a market cap that is nearly $65 billion. Its share volume was 6.8 million before 2:00 p.m., against a normal trading day volume of less than 3.5 million. Update: Enterprise’s unit price was up 0.9%, at $34.36, on 7.6 million units as of 2:50 p.m. Eastern Time.