Institutional Activity in Major MLPs in 2Q17

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Part 4
Institutional Activity in Major MLPs in 2Q17 PART 4 OF 10

Institutional Investors Hold Positions in Magellan Midstream

Recent institutional activity in MMP

In the recent quarter, Harvest Fund Advisors and UBS Financial Services unloaded major positions in Magellan Midstream Partners (MMP). The MLP is the largest refined products pipeline network in the United States. They sold 2.0 million and 0.81 million shares, respectively.

Institutional Investors Hold Positions in Magellan Midstream

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Overall, MMP saw total buying of 2.9 million shares from institutional investors during the quarter, while 4.1 million shares were sold. Among the top institutional holders, a marginal 0.10 million positions were added. That shows no major institutional activity in MMP during the recent quarter. Investors continue to hold their positions in the stock. That could be attributed to MMP’s strong distribution growth amid the uncertainties in liquid heavy MLPs, significant expansion opportunities, and low leverage.

Top five holders

Alps Advisors, Oppenheimer Funds, Tortoise Capital Advisors, Goldman Sachs Asset Management, and OFI SteelPath are the top five institutional holders in MMP. Alps Advisors continues to be the top holder, despite its unloading of 0.43 million shares in the recent quarter. It currently holds 6.3% in MMP.

Analyst recommendations

About 50.0% of analysts rate MMP a “hold,” 38.9% rate it a “buy,” and the remaining 11.1% rate it a “sell” as of August 24, 2017. MMP saw the following three rating updates last month:

  • Barclays downgraded the stock to “equal weight,” which is equivalent to a “hold.”
  • UBS upgraded the stock to a “buy.”
  • Mizuho downgraded the stock to “underperform,” which is equivalent to a “sell.”

Overall, the partnership saw six rating updates since the beginning of 2017, including two upgrades, three downgrades, and one new coverage initiation with a “hold” rating. Peers Buckeye Partners (BPL) and NuStar Energy (NS) have “hold” ratings from 56.3% and 75.0% of analysts, respectively, surveyed by Reuters. MMP is currently trading below the low range ($66.10) of analysts’ target price. Its average target price of $79.80 implies a ~21.0% return from its current price levels.


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