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Why Are Institutional Investors Bullish on EQM and RMP?

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Number of holders

In this part of our series, we’ll analyze the institutional ownership of four select midstream MLP (master limited partnership) peers. The number of holders in our group of four—EQT Midstream Partners (EQM), Antero Midstream Partners (AM), and Rice Midstream Partners (RMP)—has risen since the beginning of 2016 through October 6, 2016. Moreover, the percent of float held increased for EQM, RMP, and AM, which could indicate a bullish sentiment in these three stocks.

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Number of buyers and sellers

RMP has seen a rise of 113% in its number of buyers since the start of 2016 through October 6, 2016. By contrast, the number of buyers in CNNX has fallen 7.1% during the same period. The number of sellers in EQM and RMP has fallen 1.2% and 22.7%, respectively, while the number of sellers in AM and CNNX has risen 14.8% and 33.3%, respectively. These numbers indicate a strong bullish sentiment for EQM and RMP, bullish sentiment for AM, and bearish sentiment for CNNX.

Why are institutional investors bearish on CNNX

The institutional investor bearishness on CNNX could be attributed to its low expansion opportunities despite its low leverage. At the same time, the bullishness toward RMP and EQM might be due to the MLPs’ attractive valuations.

Top five holders

Tortoise Capital Advisors, Harvest Fund Advisor, Goldman Sachs Group, and Clearbridge Investments are the largest institutional holders in EQM, RMP, AM, and CNNX, respectively. They hold 11.9%, 16.1%, 11.1%, and 10.1%, respectively, as of October 6, 2016.

Notably, Tortoise Capital Advisors and Harvest Fund Advisor increased their holdings in EQM and RMP by 18.6% and 18.0%, respectively, according to their latest filings on June 30, 2016. At the same time, Goldman Sachs Group has decreased its ownership percentage by 13.9% in AM. Cone Midstream didn’t see any significant change in ownership by top institutional holders.

In the next and final part, we’ll take a brief look at the role of these companies’ drilling and completion costs.

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