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Spectra Energy Is Trading below Its 50-Day Moving Average

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Spectra Energy trades below 50-day moving average

Spectra Energy (SE) is currently trading 18% below its 50-day moving average and 35% below its 200-day moving average. Spectra Energy has generally been trading below its 50-day moving average since mid-2014, when energy prices began falling. Its first and second quarter results in May and August 2015, respectively, did nothing to stop its downward slide, which continued to follow energy commodity prices.

Spectra Energy recovered a bit along with crude oil prices in the first week of October 2015, but it fell below the 50-day moving average mark again after a flat dividend announcement for the third quarter on October 8.

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Combined with falling oil prices, Spectra Energy’s third quarter results announced on November 4, 2015, again brought the stock below its 50-day moving average. The company announced a 10% drop in its year-over-year (or YoY) EBITDA (earnings before interest, tax, depreciation, and amortization) for the quarter.

Low commodity prices and a weaker Canadian dollar resulted in the drop in EBITDA. SE has continued to trade below its 50-day moving average since then. The above graph shows Spectra Energy’s stock price, along with the 50- and 200-day moving averages for the stock.

Spectra Energy’s year-to-date fall

Spectra Energy has fallen 36% since the start of 2015. Other midstream energy companies such as Kinder Morgan (KMI), Williams Companies (WMB), and Enterprise Products Partners (EPD) are also down 60%, 31%, and 37%, respectively, for the same period.

The Alerian MLP ETF (AMLP), an ETF consisting of top infrastructure MLPs, has fallen 38%. The Energy Select Sector SPDR ETF (XLE) has fallen 21% since the start of 2015.

In this series, we’ll analyze price targets for SE, the performance of its various segments, its leverage, distributable cash-flows, capital expenditure, and dividend growth. We’ll also analyze its valuation relative to its historical valuation as well as to its peers. Finally, we’ll analyze the key drivers of Spectra Energy’s stock price.

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