Midstream was negative 3 of the 4 days this week and finished down around 3.0% overall, beating the S&P 500 slightly, despite another oil rout. Canada’s low beta helped the AMNA outperform the AMZ and AMUS this week. Oil prices were down for a 7th straight week, down 33% from the peak October 3rd, after the latest black Friday. The Alerian MLP Index is down just 12.2% over that time, much better than XLE , the energy sector ETF. The AMNA has done even better. Short-term relative outperformance is hard to get excited about, but it’s better than the alternative. Midstream traded down on negative oil days and positive on the one positive oil day (Wednesday), but the smaller amplitude of the downside moves was encouraging. Midstream boasts strong earnings and execution evidence, huge progress on eliminating IDRs, improving leverage, high-quality growth projects and compelling valuations. But it’s still a bit too much to ask for midstream to actually trade up in a week when oil drops 10%. When oil does find a bottom (which it always does eventually), then midstream and MLPs are positioned for across-the-board resurgence. Resurgence of interest in midstream, resurgence in fund flows and, most […]
