When it comes to Oil and Gas MLP’s, Three is Better than One

by David Fessler, Advisory Panelist

Much has been written about the benefits of owning oil and gas Master Limited Partnerships, or MLP’s as they’re commonly referred to.

They trade just like stocks, but are structured as limited partnerships instead of as corporations. Buyers purchase “units” instead of “shares”. This is done primarily to avoid corporate taxation, and allows more of the MLP’s profits to be passed onto the unit holder.

Of course, there’s no free lunch when it comes to taxes, so the unit holder is ultimately responsible for the taxes on the profits – potentially a complicated task when April 15th rolls around.

Despite the extra work for you or your accountant, MLP’s are just too good to overlook, especially if you have an

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In the weekly report that always seems to move prices 5% one way or the other, the natural gas supply report showed a higher than expected supply in natural gas. a href="http://www.bloomberg.com/apps/news?pid=20601087amp;sid=aJ._taTKDeSE"Here's the story from Bloomberg/a:br /br /blockquoteNatural gas futures fell the most in two months after a government report showed a bigger-than- estimated increase in U.S. stockpiles. Supplies in storage gained 66 billion cubic feet in the week ended July 31 to 3.089 trillion cubic feet, the a href="http://www.bloomberg.com/apps/quote?ticker=DOENUSCH%3AIND" t_delay="50" t_width="110" t_bgcolor="#ddedd9" t_fontface="Verdana,sans-serif" t_fontcolor="#000000" t_static="true" t_above="true"Energy Department/a said. Analysts forecast a gain of 61 billion. The total was a record for late July, based on weekly department data going back to 1994.br /br /“We have a lot of supply and it really weighs on the market,” said a href="http://search.bloomberg.com/search?q=Phil+Flynnamp;site=wnewsamp;client=wnewsamp;proxystylesheet=wnewsamp;output=xml_no_dtdamp;ie=UTF-8amp;oe=UTF-8amp;filter=pamp;getfields=wnnisamp;sort=date:D:S:d1" t_delay="50" t_width="110" t_bgcolor="#ddedd9" t_fontface="Verdana,sans-serif" t_fontcolor="#000000" t_static="true" t_above="true"Phil Flynn/a, vicebr /president of research at PFG Best in Chicago. “The dollar ...

Enterprise Products Partners LP (EPD) is pressuring a short-term level of resistance just short of the $23 mark after rebounding from a March low above $17. Shares of EPD turned higher with the overall market in early March and have been steadily progressing since. The MACD indicator is bullish as well, with the short-term moving average remaining ahead of the long-term moving average. Take a look below.

Open Text Corp. (OTEX) has also been on quite a rally of late, climbing from just above $22 in late October to a recent high just shy of $37, where some resistance has developed. A very steady trend that is still very much in play has been supporting this stock during its ascent. Take a look at the chart below.

Zacks Investment Research

Investors occasionally use a stock trading technique called 'Buying Dividends,' which is the technique of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend. This technique generally works only in bull markets.br /br /If you are interested in a href="http://stockerblog.blogspot.com/2008/05/buying-dividends-top-7-stocks-going-ex.html"buying dividends/a, there are many stocks in many different industries to choose from. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks.br /br /All of the following stocks have market caps over $500 million, and yield over 1%. br /br /Foot Locker, Inc. (FL) Ex-div date: 1/14/2009 Yield: 7.26% PE ratio: 10.0 PEG ratio: 0.66br /PNC Financial Services (PNC) Ex-div date: ...

As I write this Friday morning, it is a quiet day on the markets. Stocks are mostly unchanged, largely due to a lack of news and a lack of volume.

I expect volume to remain below average until Jan 5. Many portfolio managers have closed the books and there is very little news scheduled for the next 7 days.

January should be interesting. There may be excitement heading into the inauguration. It would not surprise me to see some type of Obama rally.

On the other hand, fourth-quarter earnings are going to be lousy. Current forecasts show 276 S&P 500 companies reporting a year-over-year decline in profits. Earnings for the S&P 500 will still be positive, however, with modest growth of 3.3%. Coal, drug, medical products and refining companies should report the strongest growth. Avoid steel and semiconductor companies.

The economic data won't be positive either. December was another month

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Highlighted stocks include: Anadarko Petroleum Corporation (...

We are maintaining our Hold recommendation on Sunoco Logistics Partners, L.P. (SXL) units following its strong second-quarter results, which benefited from solid contribution from its Western Pipeline System.

Importantly, the partnership increased its quarterly distribution by 11.7% year-over-year to the annualized rate of $3.74 per unit. While the partnership no doubt offers strong distribution-growth prospects, we believe that to be already reflected in its premium valuation relative to the peer group, thereby offering limited upside from current levels. Our preferred names in this space remain Enterprise Products Partners L.P. (EPD), NuStar Energy L.P. (NS) and TC Pipelines, L.P. (TCLP).

The partnership’s earnings have grown to $195 million over the last twelve months. In recent transactions, Sunoco Logistics acquired a 50% interest in a refined products terminal from Mobil Pipe Line Company for approximately $13.4 million. In April, Sunoco bought a refined products pipeline system in Texas and

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