This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

[video] Dicker: How to Trade the MLPs

Stocks in this article: KMP EEP PAA TLP ETP LINE

NEW YORK ( TheStreet) -- I was talking to Stephanie Link about master limited partnerships and whether they continue to be good investments.

Many of the stocks in the MLP space have vastly underperformed in the second half of 2013, and Stephanie and I are in total agreement as to why -- the volatility of the bond market.

Unfortunately, some analysts have taken the opportunity of a skittish bond market to try and make a case that the MLP space has become suddenly untenable, particularly one of the largest and most well-known MLPs: Kinder Morgan Partners (KMP).

Richard Kinder is the godfather of the transport and storage model for energy MLPs, so the suggestion that his structure is now unsustainable is a difficult one to make. What's true is that KMP so vastly outperformed so much of the rest of the MLP space that it was likely to take a significant fall when interest rates began to rise -- and it has.

There is an argument that Stephanie rightly makes about KMP -- that the largest of the MLPs are less nimble and consequently can become sclerotic over long periods of time as old pipelines mature and deliver smaller margins.

While Kinder Morgan Partners was not recently one of my recommendations in the space, I'm still a big believer in the ability of Rich Kinder. The fall in the stock has made me much more likely to add this name to my MLP portfolio list.

But the larger point is this: MLPs are designed to be cornerstone investments of your energy exposure. While we often talk about the need to pick names and trade stocks in the short term, the MLPs are not those kinds of stocks. You want to be holding these for the long term, providing those regular distributions in what is still a very low-yield environment.

I talk more about MLPs with Stephanie in the video above.

At the time of publication the author had positions in TLP and PAA. Action Alerts PLUS had a position in LINE.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Dan Dicker has been a floor trader at the New York Mercantile Exchange with more than 25 years of oil trading experience. He is a licensed commodities trade adviser.

Dan is currently President of MercBloc LLC, a wealth management firm and is the author of "Oil's Endless Bid," published in March of 2011 by John Wiley and Sons.  

Dan Dicker has appeared as an energy analyst since 2002 with all the major financial news networks. He has lent his expertise in hundreds of live radio and television broadcasts on CNBC, Bloomberg US and UK and CNNfn.

Dan obtained a bachelor of arts degree from the State University of New York at Stony Brook in 1982.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,888.10 +83.30 0.47%
S&P 500 2,070.45 -0.20 -0.01%
NASDAQ 4,768.4630 +3.0830 0.06%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs