This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Kinder Morgan Deal Bodes Well For Pipelines

The old adage about "location, location, location" does not only apply to real estate purchases, says Brian Watson, portfolio manager of the SteelPath MLP Alpha Fund (MLPAX), but to oil pipeline stocks as well.

"You want own a pipeline coming from producing regions going to quickly growing production groups. For example, it's great to have a pipeline flowing towards Florida because we know population growth there is strong," says Watson.

The $300 million fund, which was launched in March 2010, has returned 2% over the past year, better than 54% of its peers in Morningstar's energy category.

One of Watson's largest holdings is Buckeye Partners (BPL - Get Report) which bought terminals along the Gulf Coast from BP (BP) in the wake of the Macondo oil spill. Unlike most other terminals, Buckeye's recent additions are advantageous because they can accept the very largest oil tanker ships.

"These assets were not being utilized as they should have been," says Watson . "We think Buckeye will do a much better job and grow the revenue of those assets significantly."

As for M&A in the pipeline industry, Watson expects it to pick up in the wake of the proposed El Paso (EPB) and Kinder-Morgan (KMP) merger, a deal he said makes a lot of sense for both companies.

"El Paso's pipeline assets were amongst the best in the industry and Kinder-Morgan will only increase their value," says Watson. "It adds perfectly to Kinder's current asset profile. It's really were the assets ought to be."
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BPL $68.88 -1.30%
EPD $25.90 0.97%
KMP $102.03 1.98%
OKS $36.46 -2.10%
AAPL $92.34 -0.97%


Chart of I:DJI
DOW 17,679.20 +18.49 0.10%
S&P 500 2,044.85 -5.78 -0.28%
NASDAQ 4,695.1520 -21.9420 -0.47%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs