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Moving averages
As of December 31, 2015, the 100-day moving averages of many midstream companies’ stocks showed strong resistance. For example, most of the midstream companies in the following table were trading below their 100-day moving averages. On average, midstream companies are trading 18.8% below their 100-day moving averages.
Kinder Morgan (KMI) and Williams Companies (WMB) were trading 43.5% and 34.1%, respectively, below their 100-day moving averages as of December 31. Midstream companies were also trading well below their 20-day moving averages.
Magellan Midstream Partners (MMP) managed to trade 3.8% above its 100-day moving averages as of December 31. This is close when compared to other midstream companies. The Alerian MLP ETF (AMLP) was trading 7.5% below its 100-day moving average.
Wall Street analysts’ consensus estimate
Wall Street analysts’ consensus estimate suggests a 43.7% upside for these midstream companies compared to a 45.5% upside for large-cap upstream companies. Over the next 12 months, midstream operators Williams Companies and Energy Transfer Partners (ETP) could see rises of 53% and 49%, respectively, from their levels as of December 31. Below is a rundown of three other midstream operators and Wall Street analysts’ estimate for each company over the next 12 months:
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Kinder Morgan could see a 44.7% rise
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Spectra Energy could see a 37.4% rise
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Williams Partners (WPZ) could see a 37.2% rise
Interestingly, the forward PE (price-to-earnings ratio) for the next year suggests that Energy Transfer Partners and Williams Partners are cheaper than other MLPs.
In the next part, we’ll discuss the moving averages and analyst estimates of upstream companies.
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