ETE Rallied after Court Upheld Merger Exit with WMB



Weekly performance

Energy Transfer Equity (ETE), which directly and indirectly owns the general partner of Energy Transfer Partners (ETP) and Sunoco Logistics Partners (SXL), respectively, rose 0.7% last week. At the same time, the Alerian MLP ETF (AMLP), which is comprised of 25 energy MLPs, fell 1.8%.

Last week, Energy Transfer Equity had a weak start, but it recovered by the end of the week. Energy Transfer Equity’s gains later during the week can be attributed to the Delaware Supreme Court’s ruling to uphold the Energy Transfer Equity-Williams Companies (WMB) merger termination challenged by Williams Companies during 2016. The ruling saved Energy Transfer Equity from paying a $1.5 billion merger termination fee.

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Year-to-date returns         

Energy Transfer Equity had a weak start to 2017. It has fallen 2.1% since the beginning of 2017, while it rose 40.5% during 2016. In comparison, Energy Transfer Equity’s peers Western Gas Equity Partners (WGP) and EQT GP Holdings (EQGP) have risen 5.7% and 5.7%, respectively, in 2017. Williams Companies, its c-corp peer, has lost 7.9%. Energy Transfer Equity and most of its peers are still trading lower than the levels before the rout in energy prices.

Series overview

In this series, we’ll try to find out whether Energy Transfer Equity can gain upward momentum from here. We’ll look into Energy Transfer Equity’s technical indicators including moving averages and the relative strength index. We’ll also discuss the company’s valuation and analysts’ projections.


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