Are MLPs Bottoming Out? (Update)

The question to ask is whether this marked the bottom in the MLP sector. Please note: we have updated the prices on each at the end.

For whatever this is worth, we outlined what the 10% correction would have to be on Monday. That sort of correction is long overdue. It may even still happen, and some investors should hope that a 10% correction will occur. Still, after a massive volatility spike and subsequent market tank in recent days, we wanted to show the key MLP ETFs and funds for how bad the carnage has been. As a reminder, distributions for MLPs are not straight dividends. They include a return of capital on top of income.

UPDATE: Unfortunately, Tuesday’s NYMEX crude settled down 4.6% at $81.84 on Tuesday. That isn’t going to be a great factor for support. MLP closing prices below were given an updates for the close.

JPMorgan Alerian MLP ETN (NYSEMKT: AMJ) was down as low as $43.45 on Tuesday, but shares were last seen down only 0.5% at $46.05. Its 52-week range is $43.25 to $54.13, and the volume in mid-afternoon was already about four times normal at 4.5 million shares. Update: This MLP ETF was down 18 cents, or 0.4%, to $46.10 on 4.9 million shares at 2:50 p.m.

Alerian MLP ETF (NYSEMKT: AMLP) was down as low as $16.62 for a new year low earlier on Tuesday, but shares were last seen up 11 cents at $17.43. This ETF’s 52-week range is $16.63 to $19.35, and the volume in mid-afternoon was already about four times normal at 12.7 million shares. Update: The Alerian MLP ETF was still up 15 cents to $17.45, on 13.4 million shares, as of 2:50 p.m. Eastern Time.

Kayne Anderson MLP Investment Co. (NYSE: KYN) is a closed-end fund tracking MLPs. Its stock hit a low of $35.40 on Tuesday, but the fund was last seen down 44 cents at $36.10, against a 52-week range of $34.50 to $41.35, and the volume in mid-afternoon was 675,000, versus average daily volume of about 235,000. Update: The Kayne Anderson price was down 0.8% to $36.24 as of 2:50 p.m. Eastern Time.

The ClearBridge Energy MLP Total Return Fund (NYSE: CTR) was down as low as $19.15 on Tuesday, but its shares were down only 17 cents at $19.97 on last look, against a 52-week range of $19.15 to $24.25, and the volume was about three times normal at 342,000 shares. Update: The ClearBridge price was down 1.2%, at $19.90, as of 2:50 p.m. Eastern Time.

Enterprise Products Partners L.P. (NYSE: EPD), the largest MLP, was last seen up 1.5% at $34.56. That is after hitting a low of $31.68 Tuesday morning. Keep in mind that Enterprise has a market cap that is nearly $65 billion. Its share volume was 6.8 million before 2:00 p.m., against a normal trading day volume of less than 3.5 million. Update: Enterprise’s unit price was up 0.9%, at $34.36, on 7.6 million units as of 2:50 p.m. Eastern Time.

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