Williams Companies Recovered after Falling Last Week
Williams Companies’ weekly performance
Williams Companies (WMB) ended its two-week winning streak with a 0.9% fall for the week ending April 13, 2017. At the same time, the Alerian MLP ETF (AMLP) and the SPDR S&P 500 ETF (SPY)(SPX-INDEX) fell 1.3% and 1.1%. Williams Companies forms 0.12% of SPY. However, the company had a good start this week. Williams Partners (WPZ), its subsidiary, announced the sale of its Geismar plant to a Calgary-based Nova Chemical for $2.1 billion. The transaction’s proceeds will mainly be used for debt repayment and funding capital projects.
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Despite recent gains, Williams Companies is still trading below the levels at the beginning of 2017. It has lost 3.1% YTD (year-to-date). In comparison, Williams Companies’ peers, TransCanada (TRP) and Enterprise Products Partners (EPD) have risen 6.0% and 2.6%. AMLP has gained 0.2% in 2017.
Williams Companies’ underperformance relative to AMLP can be attributed to the sharp decline in its stock prices following its financial reorganization announcement. The announcement included removal of IDRs from Williams Partners’ capital structure, conversion of the economic GP (general partner) interest in Williams Partners to non-economic GP interest, and Williams Partners’ distribution cut. The measures are negative for Williams Companies in the short run. However, the company expects to benefit from the measures in the long run.
In this series, we’ll discuss whether Williams Companies can gain upward momentum from here. We’ll look into Williams Companies’ technical indicators including moving averages and implied volatility. We’ll also discuss Williams Companies’ valuation and analysts’ projections.