A more tangible risk to the MLP space is the recent flurry of IPOs. CNBC's Bob Pisani reported that of 44 IPOs since September, seven of them have been MLPs. Demand for MLPs and funds that own MLPs is hot and, in a pattern repeated many times before, the investment industry is creating more supply to meet the demand. The risk is that too much supply is created and prices go down.
For now, though, investors need yield and the market is not saturated now with MLPs, which makes for a continued favorable backdrop for the segment.
At the time of publication the author had no position in any of the stocks mentioned.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV