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What Could Limit Plains All American Stock’s Upward Movement

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Jan. 31 2018, Updated 9:03 a.m. ET

PAA in the last year

Plains All American Pipeline (PAA) stock underperformed peers in the last year period. PAA fell 28% in the last 12 months. In comparison, Enterprise Products Partners (EPD) was up 1%, whereas ONEOK (OKE) was up 10%. Kinder Morgan (KMI) fell 16%. The Alerian MLP ETF (AMLP) is down 10%.

Crude oil prices were up 23% over the last year period. Learn about the factors impacting crude oil prices in US Oil Supplies and Gasoline Inventories Could Impact Oil Prices. Broader markets (SPX-INDEX) were up nearly 28%.

A second distribution cut, announced in August 2017, significantly affected Plains All American’s stock last year.

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PAA’s moving averages

Plains All American stock is currently trading 8% above its 50-day moving average. However, it’s trading 2% below its 200-day moving average. PAA’s 200-day moving average may act as a resistance to the stock in the near term. On the other hand, its 50-day moving average should act as a support for the stock.

PAA’s yield

Plains All American Pipeline is currently trading at a distribution yield of 5.3%. In comparison, Enterprise Products Partners (EPD) is trading at a yield of ~5.8%, while Magellan Midstream Partners (MMP) is trading at a yield of ~4.8%. Currently, the SPDR S&P 500 ETF (SPY)(SPX-INDEX) yields ~1.8%.

While PAA is currently trading at a yield close to its peers, its two distribution cuts, higher leverage, and commodity price exposure for its supply and logistics segment may concern income investors.

Let’s see what Wall Street analysts recommend for Plains All American in the next part of this series.

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