Recent institution activity in ANDX
Tortoise Capital Advisors and Harvest Fund Advisors added major positions in Andeavor Logistics (ANDX) in 3Q17, buying ~11.6 million and ~2.6 million shares, respectively.
According to a related press release, the increase in the position of Andeavor (ANDV), ANDX’s sponsor, is due to the equity issuance “to Andeavor in exchange for the cancellation of Andeavor Logistics’ incentive distribution rights and the conversion of its economic general partner interest into a non-economic general partner interest.”
The simplification transaction was completed after the completion of the merger between Andeavor Logistics and Western Refining Logistics.
Among the top institutional holders in ANDX, ~17.1 million net positions were added in 3Q17, which indicates a bullish sentiment toward ANDX. Global X Management and Goldman Sachs Asset Management (US) were the biggest sellers in 3Q17, with 0.46 million and 0.44 million shares sold, respectively.
Why are institutional investors bullish on ANDX?
Institutional investors’ bullishness toward ANDX could be attributed to the following factors:
- expected synergies from its merger with Western Refining Logistics
- simplified capital structure
- strong distribution growth
The partnership declared a distribution of $0.9852 per unit for the third quarter, which represented a 13% YoY (year-over-year) increase.
Tortoise Capital Advisors, Harvest Fund Advisors, Center Coast Capital Advisors, Alps Advisors, and Bank of America Merrill Lynch (US) are the top five institutional holders in ANDX. Tortoise Capital Advisors is the largest institutional holder in partnership, holding 5.7% in ANDX.
As of November 14, 78.6% of surveyed analysts recommend a “buy” for ANDX, and the remaining 21.4% recommend a “hold.” Peers Phillips 66 Partners (PSXP) and Shell Midstream Partners (SHLX) have “buy” recommendations from 78.6% and 66.7% of analysts, respectively. ANDX’s average target price of $58.5 implies a ~31% upside potential from its current price level.