Holly Energy Partners: Top Midstream MLP Loser on September 4

Top losers

In the last part of this series, we saw the top five midstream MLP gainers on Friday, September 4, 2015. In this part, we’ll discuss the top five midstream MLP losers on the same day.

Holly Energy Partners: Top Midstream MLP Loser on September 4

Holly Energy Partners

Holly Energy Partners (HEP) was the top loser among midstream MLPs at the end of trading on Friday, September 4. It fell 5.28% on Friday. However, it might bounce back considering its strong annual distribution growth guidance and the recent upgrades in its ratings. Holly Energy Partners gave a distribution growth guidance of 8% for 2015–2017 at its Analyst Day held on September 3, 2015.

Also, the partnership announced the purchase of “recently completed naphtha fractionation & the hydrogen generation unit constructed at HFC’s El Dorado refinery.” The transaction is expected to be immediately accretive with the addition of $6.9 million to the company’s 2016 EBITDA (earnings before interest, tax, depreciation, and amortization). Holly Frontier (HFC) is Holly Energy Partners’ sponsor.

The company also announced the acquisition of a 50% stake in Frontier Pipeline from Enbridge (ENB). The pipeline supplies crude from “Canadian and Rocky Mountain crudes to Salt Lake City area refiners.” The transaction is expected to add $6–$7 million annually in EBITDA.

American Midstream Partners

American Midstream Partners (AMID) is next on our list of the top five midstream MLP losers on September 4. It fell 4.17% on Friday. American Midstream Partners has lost 37.04% of its equity value since the beginning of this year. The partnership is primarily involved in natural gas, oil, and condensate gathering, processing, treating fractionating, and transporting services.

Other losers

Crestwood Midstream Partners (CMLP), Phillips 66 Partners (PSXP), and Rose Rock Midstream (RRMS) were among the top five midstream MLP losers on Friday, September 4. They lost 2.76%, 2.03%, and 1.96% in the last trading session, respectively. These three stocks have returned -51.32%, -18.11% , and -35.09% YTD (year-to-date), respectively.

Crestwood Midstream Partners’ poor market can be attributed to lower NGL (natural gas liquid) and crude oil prices affecting its crude oil and NGL services segment. For an in-depth analysis of Crestwood Midstream Partners’ recent operating and market performance, read Crestwood Midstream’s 2Q15 Results: Highlights for Investors.

The Alerian MLP ETF (AMLP) and the UBS ETRACS Alerian MLP ETN (AMU) have returned -18.44% and -23.93% YTD. Crestwood Midstream Partners accounts for 1.31% of AMLP. For context, the upstream energy company heavy SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has returned -24.34% YTD.