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What It Means that Midstream Companies Are Trading below 100-Day Moving Averages

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Jan. 13 2016, Updated 1:48 p.m. ET

Midstream companies are trading below their moving averages

As of January 12, 2016, the 100-day moving averages of many midstream companies’ stocks showed strong resistance, although most of the midstream companies in the following table were trading below their 100-day moving averages. On average, midstream companies are trading 29% below their 100-day moving averages.

Specifically, Kinder Morgan Energy Partners (KMI) and Williams Companies (WMB) were trading 45% and 55%, respectively, below their 100-day moving averages as of January 12. Midstream companies were also trading well below their 20-day moving averages.

Spectra Energy Partners (SEP) managed to trade 2.2% below its 100-day moving average as of January 12. This is close when compared to other midstream companies. By comparison, the Alerian MLP ETF (AMLP) was trading 19% below its 100-day moving average.

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Wall Street analyst consensus estimates suggest a big upside

Wall Street analyst consensus estimates suggest an impressive 75% upside for these midstream companies, when compared to the 64% upside consensus estimates are suggesting for large-cap upstream companies. Over the next 12 months, midstream operators Williams Companies and Energy Transfer Partners (ETP) could see rises of 147% and 78%, respectively, from their levels as of January 12. Below is a rundown of three other midstream operators and the Wall Street analyst estimates for each company over the next 12 months:

  • Kinder Morgan could see a 57% rise.
  • Spectra Energy could see a 35% rise.
  • Williams Partners (WPZ) could see a 93% rise.

Interestingly, the forward PE (price-to-earnings ratio) for the next year suggests that Energy Transfer Partners and Williams Partners are cheaper than other MLPs.

In the next and final part of this series, we’ll discuss the moving averages and analyst estimates of renewable energy companies.

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