MLPs Rallied Sharply This Week

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Image Source: Teekay.

After getting clobbered over the past few months MLPs have finally started to recover, with this week's top story in the

energy sector being a massive move higher by MLPs. In fact, according to S&P Capital IQ data, five of the best performing

energy stocks this week were MLPs. Leading the way were Energy Transfer Equity (NYSE: ETE), Archrock

Partners (NASDAQ: APLP), Martin Midstream Partners (NASDAQ: MMLP), Teekay Offshore

Partners (NYSE: TOO), and Teekay LNG Partners (NYSE: TGP).

What:Energy Transfer Equity (NYSE: ETE) jumped 16.7% this week.

So What: Key driver: Inching forward

on the merger Energy Transfer Equity’s

pending merger with Williams Companies continues to inch forward and this past week Williams reiterated its commitment to the merger

Now What: According to an SEC filing,

Williams’ CEO sees a shareholder vote as early as April 20

Meanwhile, Energy Transfer Equity dispelled rumors that it planned to sell its stake in Sunoco to pay for the deal

Key takeaway: Investors are cheering as this merger drama appears to be nearing an end

What:Teekay LNG Partners (NYSE: TGP) surged 20.5% this week.

So What: Key driver: The MLP rally After falling as much as 35% on

the year, Teekay LNG Partners rallied along side most other MLPs this week

Higher oil and gas prices, improved industry credit conditions, and short covering all contributed to this week’s rally

Now What: Investors blindly sold off

MLPs over the past few months and are now starting to come to their senses

Key takeaway: After having time to think things over, investors realized Teekay LNG Partners isn’t in any financial trouble

What:Martin Midstream Partners (NASDAQ: MMLP) leapt 24.1% this week.

So What: Key driver: The MLP rally Like most MLPs, Martin

Midstream Partners sold off to start the year, down more than 35% at one point

Bargain hunters are now starting to move in and scooping up MLPs like Martin on the cheap

Now What: Investors like the fact that

Martin Midstream won’t be dependent on the capital market this year and will maintain a distribution coverage ratio of 1.0 times

Key takeaway: It turns out that the death of MLPs has been greatly exaggerated

What:Archrock Partners (NASDAQ: APLP) surged more than 39.9% this week.

So What: Key driver: The MLP rally After selling off units by

more than 25% to start the year, bargain hunters started to emerge

Investors shrugged off Archrock’s credit rating being downgraded deeper into junk by Moody’s on Monday

Now What: That’s despite the fact that the

credit rating agency made the downgrade to “reflect declining cash flow and weakening leverage resulting from lower fleet utilization and pricing pressure for natural gas compression units”

Key takeaway: Despite the credit concerns, investors are starting to believe that the company will make it through the downturn without any significant financial problems

What:Teeky offshore Partners (NYSE: TOO) surged over 62.1% this week.

So What: Key driver: The MLP rally Units of Teekay Offshore

Partners were cut in half to start the year after investors worried that the company might be heading into troubling times after a customer canceled a long standing contract

Now What: With oil prices rallying in recent

weeks it’s easing the minds of investors that the company’s customers would start to cancel contracts in droves

Key takeaway: Investors are starting to see a light at the end of the tunnel that the oil market downturn might be nearing an end

This could be the next billion-dollar iSecret