Institutional Activity in Major MLPs in 2Q17

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Part 8
Institutional Activity in Major MLPs in 2Q17 PART 8 OF 10

Are Institutional Investors Bullish on Cheniere Energy Partners?

Recent institutional activity in CQP

Cheniere Energy Partners (CQP), the midstream MLP subsidiary of Cheniere Energy (LNG), saw total buying of 2.2 million shares during the recent quarter. At the same time, 2.1 million positions were sold. Goldman Sachs and UBS Financial Services were the biggest buyers in CQP with 0.86 million and 0.48 million shares bought, respectively. Fidelity Management & Research and Millennium Management were the biggest sellers with 0.75 million and 0.43 million shares sold, respectively.

Are Institutional Investors Bullish on Cheniere Energy Partners?

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Why are institutional investors bullish on CQP?

Institutional investors’ bullishness toward CQP could be attributed to the following factors:

  • attractive valuation
  • strong earnings growth with ramp-up of three trains at Sabine Pass
  • timely completion of Train 3 and 4 – The company began commissioning Train 4 in July 2017. CQP is expecting its substantial completion in the fourth quarter of 2017. The first DFCD (date of first commercial delivery) from Train 4 is expected in the first half of 2018.

Top five holders

GSO Capital Partners, Harvest Fund Advisors, ClearBridge Investments, Eagle Global Advisors, and Goldman Sachs are the top five institutional holders in CQP. GSO Capital Partners continues to be the top institutional holder in the partnership. It currently holds 4.2% in CQP.

Analyst recommendations

About 53.8% of analysts rate CQP a “hold,” and the remaining 46.2% rate it a “buy” as of August 28, 2017. CQP was downgraded by Barclays last month to “equal weight,” which is equivalent to a “hold.” Overall, the partnership has seen four rating updates in 2017, including two new coverages and two downgrades. CQP is currently trading below the low range ($27.60) of analysts’ target price. Its average target price of $34.60 implies a ~26.0% return from its current price levels.


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