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Enterprise Products Trades 6.5% below 50-Day Moving Average

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Enterprise Products has been trading below 50-day moving average since September

Enterprise Products Partners (EPD) is currently trading 6.5% below its 50-day moving average and 21% below its 200-day moving average. The stock has been trading below its 50-day moving average since September 2014. EPD crossed above its 50-day moving average in April after it announced a 1.4% increase in quarterly distributions and after crude oil prices improved temporarily. The stock again fell below its 50-day moving average in May, following the path of crude oil prices.

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The above graph shows EPD’s stock price along with its 50-day and 200-day moving averages. EPD moved above its 50-day moving average on October 2 after it announced a 1.3% increase in quarterly distributions. EPD also announced the intent of affiliates of Enterprise Products Company, which owns EPD’s general partner, to purchase $50 million of EPD’s common units. The positive news coupled with a temporary improvement in crude oil prices in the first week of October resulted in the stock crossing above its 50-day moving average.

EPD again moved above its 50-day moving average on October 29, when it announced its 3Q15 results. The company had flat distributable cash flow and a distribution cover of 1.3x for the quarter. Again, this crossover was temporary, and EPD stock fell below its 50-day moving average, following the fall in crude oil prices. Since then, the stock has continued to trade below its 50-day moving average.

EPD’s year-to-date fall

EPD stock has fallen 33% since the start of 2015. It outperformed other midstream energy companies such as ONEOK (OKE), Enbridge Energy Partners (EEP), and Energy Transfer Partners (ETP), which have fallen 56%, 46%, and 56%, respectively, in the same period. The Alerian MLP ETF (AMLP), which holds top infrastructure MLPs, has fallen 38%.

In this series, we’ll analyze EPD’s price targets, the performance of EPD’s various segments, its leverage, distributable cash flows, capital expenditure, and distribution growth. We’ll also analyze its valuation relative to its historical valuation and to its peers. Finally, we’ll analyze the key drivers of EPD’s stock price.

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