Enbridge Energy Partners (EEP) is currently trading 4% below its prices at the beginning of 2016. Other midstream energy companies such as Plains All American Pipeline (PAA), ONEOK Partners (OKS), and Williams Partners (WPZ) have risen 27%, 32%, and 20%, respectively, in the same period.
The Alerian MLP ETF (AMLP), which holds top infrastructure MLPs, has fallen just 1% since the start of 2016.
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The above graph shows EEP’s stock price compared to its 50-day and 200-day moving averages.
EEP’s stock was trading below its 50-day and 200-day moving averages in 1Q16. It gained momentum after February 2016, crossing its 50-day average in April 2016 and its 200-day average in June 2016.
The stock has mostly been trading above its 50-day and 200-day moving averages since July 2016, but it fell below its 50-day moving average after it announced its 3Q16 results.
In September 2016, EEP’s sponsor, Enbridge (ENB), announced its merger with Spectra Energy (SE). Enbridge indicated that in the process of the integration of the two companies, Enbridge’s owned vehicles, including EEP and Midcoast Energy Partners (MEP), would “be reviewed in context of the combined enterprise.”
EEP recently announced a strategic evaluation of MEP. The partnership expects that now, this evaluation “could be affected by the merger and extend into 2017.”
In this series, we’ll analyze EEP’s price targets, the performances of its various segments, its leverage, its distributable cash flow, its capital expenditure, and its distribution growth. We’ll also analyze its valuation relative to its historical valuation and those of its peers. Finally, we’ll analyze the key drivers of EEP’s stock price.
Let’s begin with an overview of EEP’s business and assets in the next article.