Trade Entry: NGL Energy Partners
It’s Friday, the market is down a bunch, and if you’re like me you are looking for a good entry that could provide a nice profit if the market rebounds next week. To fill that bill, I am recommending a buy entry for NGL Energy Partners LP (NYSE:NGL).
Yesterday NGL announced a secondary equity issuance. MLPs do this fairly regularly to raise capital to pay for growth projects. A secondary will almost always drive the unit price down a few percentage points. Combine the secondary with today’s big down day in the market and NGL is down 5.5%.
At this point I like NGL as both an opportunity for short term profits and I have been closely watching the company as an attractive total return play in the MLP space. Initially, I am treating this recommendation as a short term opportunity, looking for a 10% gain in the near term of the next two to four weeks, which would be if the unit price moves above $30.
Recommendation: Buy NGL today, March 6 before the market close, under $27.60.