The 30 Day Dividends position in Midcoast Energy Partners (NYSE: MEP) initiated at the end of June has been the worst performing recommendation to date for the newsletter.
After the recommendation, MEP got off to a hot start, gaining close to 15% in a couple of months. However, since early September, the MLP has been hit with a couple of Wall Street downgrades and a poor third quarter results performance. As I write this, MEP is down 25% from the entry point when the recommendation was made to subscribers.
Today, December 5, MEP management presented the company’s plans to reduce expenses in 2015 and at the same time grow the business for next year. Guidance shows a 70% increase in distributable cash flow for next year and distribution growth in the low teens percentage. Starting in 2016 the company expects distribution growth to move into the high teens.
I am putting this out to recommend that subscribers holding MEP should continue to do so and seriously consider adding to their position.
For those who do not yet own MEP, the unit price should recover back into the mid $20’s by the second half of 2015, producing a very nice gain from the current $16 unit price.
You can find more details from the company here or listen to a recording of this morning’s presentation here.