MPLX trades below 50-day moving average
MPLX LP (MPLX) is currently trading 14% below its 50-day moving average and 65% below its 200-day moving average. The stock crossed its 50-day moving average in a bullish manner on December 23, 2015. The lifting of a ban on US oil exports on December 18 sent most energy MLPs up.
However, the stock again fell below its 50-day moving average on January 6, 2016, following a slide in crude oil prices. The stock has continued to trade below its 50-day moving average since then.
MarkWest Energy merger
MPLX stock has generally been moving with the broader energy MLP sector since mid-2015. The stock, which was already trading below its 50-day moving average, fell 15% on July 13, 2015—the day it announced merger plans with MarkWest Energy.
MPLX crossed above its 50-day moving average on November 3, 2015. It gained after it announced its 3Q15 results on October 29. MPLX increased its 3Q15 distributions by 6.8% compared to 2Q15. It fell 12% on December 1, 2015, when MarkWest Energy’s unitholders finally approved the merger with MPLX.
The cash consideration for the merger was increased twice from $3.37 to $5.21 and then to $6.20 per MarkWest’s common unit. The above graph shows MPLX’s stock price along with its 50-day and 200-day moving averages.
MPLX’s 2016 stock performance
MPLX has fallen 17% since the start of 2016. Other midstream energy companies such as ONEOK (OKE), Enbridge Energy Partners (EEP), and Energy Transfer Partners (ETP) have fallen 8%, 10%, and 17%, respectively, in the same period. The Alerian MLP ETF (AMLP), which holds top infrastructure MLPs, has fallen 14% since the start of 2016.
In this series, we’ll analyze MPLX’s price targets, the performance of MPLX’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 MPLX’s stock price.