Magellan Midstream Partners (NYSE:MMP) is an excellent choice for risk averse investors with a long-term investment horizon. Like any other limited partnership, it also offers a great source of income. In terms of income growth, Magellan has been one of the best in the sector. Despite the stellar growth in its cash distributions even in the low-commodity price environment, most of the fundamentals of the partnership remain in good shape. The unit price is up more than 12% year-to-date, but I believe the next 2-3 years will take it even higher.
One of the best things about the company is that around 60% of its margins come from the refined products business. While crude oil prices can be affected due to the cyclicality and there is generally more volatility, refined products get a boost in poor commodity price environment as well. As the crude prices fall, refined products become cheaper to produce and the end customer benefits. Along with the customer, refiners also benefit which prompts them to produce more. This situation becomes beneficial to the midstream players as well due to the increased volume. On the other hand, if the oil prices start to pick up, the price of refined products also starts to move higher. Economy needs to be stronger in order for the refined products prices to remain higher. Magellan’s exposure to crude oil is also quite strong which means that the company will benefit from a recovery in the oil prices as well. Both these factors are going in favor of the partnership. Let’s first look at the fundamentals and how they have behaved in the last three years.
Hot Cheap Stocks To Own For 2018: Public Service Enterprise Group Incorporated(PEG)
- [By Shauna O’Brien]
Jefferies announced on Tuesday that it has upgraded Public Service Enterprise Group Inc. (PEG).
The firm has lifted its rating on PEG from “Hold” to “Buy,” and has raised the company’s price target from $36 to $37. This price target suggests a 12% increase from the stock’s current price of $32.42.
Analyst Paul Fremont commented: “We are upgrading to Buy based on the improving outlook for regulatory approval of the company’s “Energy Strong” capital spending program.
“Each $1.0 billion of incremental spending will add an estimated $0.10 to PEG’s earnings. We assume that incremental spending is funded by debt and by incremental cash expected from the increasing gas basis differential between the Leidy hub and New Jersey. Our new estimates are considerably higher than consensus in 2014-16.”
Public Service Enterprise Group shares were mostly flat during pre-market trading Tuesday. The stock is up 6% YTD.
Hot Cheap Stocks To Own For 2018: Flowserve Corporation(FLS)
- [By Damon Churchwell]
Increasing sales and margins
A second, even larger, flow technology company to consider is Flowserve (NYSE: FLS ) . The company’s flow control systems are utilized by a wide range of industries, led by oil & gas, chemicals, and power generation.
Hot Cheap Stocks To Own For 2018: Cinemark Holdings Inc(CNK)
- [By Chris Lange]
While most people get their content online in an increasingly digital world, we shouldnt forget where most of it came from the movie theater. While Netflix, Hulu and HBO are cleaning up with their streaming services and content, the newest content is consistently at the theater. Cinemark Holdings Inc. (NYSE: CNK) is looking to take advantage of this idea with its newest offering to its customers.
- [By Monica Gerson]
Cinemark Holdings, Inc. (NYSE: CNK) is projected to report its quarterly earnings at $0.46 per share on revenue of $699.23 million.
Aecom (NYSE: ACM) is expected to report its quarterly earnings at $0.72 per share on revenue of $4.55 billion.
- [By Jon C. Ogg]
24/7 Wall St. covers many of the top analyst upgrades and downgrades each morning of the week. The downgrade brigade included a Credit Suisse report on Cinemark Holdings Inc. (NYSE: CNK) that effectively gave the movie cinema chain the equivalent of a “Sell” rating. It was actually a negative view on the entire movie chain sector.