Monday, December 21, 2015

"Morgan Stanley: ‘Still Too Early’ to Buy MLPs" (AMLP)

I may have to sue Morgan Stanley.
AMLP $10.55 up 11 cents. All-time low $10.55 on December 8th.

From Barron's Income Investing:
It’s the question on the mind of every investor with even a passing interest in energy-focused master limited partnerships. Is it time to buy?

It has certainly seemed like it was the time to buy at other points in the past year. And each time the sector has moved down another leg along with the price of crude. The Alerian MLP ETF (AMLP), which tracks the benchmark MLP index, has stabilized some since the Federal Reserve raised interest rates last week, but it is still near its lows, down 40% this year.

Now the folks at Morgan Stanley Research are saying it is still to soon to buy. This comes in a Monday research note looking at which equity sectors are mispriced since Fed liftoff. They write of MLPs:
Our view is that it is still too early to buy the MLPs. There are many concerns about bankruptcies in the energy sector coming,and both Evan Calio and Adam Longson are incrementally negative about oil dynamics in the near term. Many yield-seeking investors, particularly on the retail side,are very overweight this group,and there may be substantial selling in front of us....

Note the interior quote marks in the Barron's headline.

Long time readers may remember such hits as "Buying Oil Stocks: It's Still Too Early (XLE; XOP)".
Or as documented in July 21's "Both the Major Oil Company ETFs Set Multi-Year Lows This Morning (XLE; XOP)":

I'm Troy McClure. You may remember me from such earlier posts as:

Jan. 30

It's too early

"It's Too Early"
Jan. 12

It's Too Early


It's (still) Too Early
Jan. 2

It's Too Early 
Dec. 8

It's Too Early
Nov. 29

It's Too Early
Nov. 4

It's Too Early
Oct. 27

It's Too Early
Oct. 22
It's Too Early

Repetitious but at least we varied the type size/face. 

There are quite a few more during the summer-fall of 2014 from before we settled on the three word formulation. 

Going forward we'll try to change it up a bit for our patient (and long suffering) readers.