Portfolio Action Summary

• SemGroup (NYSE: SEMG) added to the Growth Portfolio. Buy below $82. (See Best Buys)
• Holly Energy Partners (NYSEL: HEP) added to the Growth Portfolio. Buy below $40. (See Best Buys)
• NGL Energy Partners (NYSE: NGL) buy below target raised to $50 from $44

Alliance Holdings (Nasdaq: AHGP) hit an all-time high of $69.72 per unit on May 7, but finished down 1 percent for the month (total returns calculated from May 1 to May 30) and below our buy target. Buy AHGP up to $68.

Atlas Resource Partners (NYSE: ARP) announced on May 16 a follow-on offering of $100 million 7.75 percent senior unsecured notes due 2021. Proceeds will fund a portion of the $420 million price tag for ARP’s acquisition of a non-operated interest in Colorado oil wells from Merit Energy.

The unit price slid 5.6 percent last month, encouraging insiders to increase their stakes. Chairman and CEO Edward E. Cohen bought 40,000 units priced from $19.80 to $19.87 for a total of $793,000 on May 19, boosting his direct and indirect holdings to some 500,000 units. President Matthew A. Jones bought 10,000 units the same day. Hedge fund manager Leon G. Cooperman purchased 74,475 units at $19.21 to $19.25 per unit on May 12. Cooperman now owns roughly 7 million units. Buy ARP up to $23.

Boardwalk Pipeline Partners (NYSE: BWP) rallied 10.2 percent in May. The partnership now has an average recommendation of “Hold” by the 15 analysts covering it. Only one now rates it a sell. That’s a big change from two months ago, when almost half of the analysts following BWP rated it a sell. We rate BWP a Buy below $15.

Buckeye Partners (NYSE: BPL) units hit an all-time high of $81.15 on May 7 and finished the month up 4.2 percent.

Buckeye’s US Midwest pipeline segments will have a busy month of June as the company recently announced its facilities were overbooked for the month and asked shippers to revise their binding nominations.

In May, vice president Muslih A. Khalid sold 10,000 units worth about $763,000. Another VP, Robert A. Malecky sold 15,219 units for roughly $1.2 million.

On May 2, Buckeye announced a 1.25 cent boost to its quarterly distribution, bringing it to $1.10 per unit. This represents a 5 percent increase over the prior year’s quarter and a yield of about 5.6 percent at current prices. Buy BPL up to $70.

Crestwood Midstream Partners (NYSE: CMLP) unit price fell 3.3 percent last month following a disappointing quarterly report.

Director John J. Sherman, the former CEO of CMLP merger partner Inergy, continued unloading his stake, selling 187,581 units in May at an average price of $22.02, for proceeds of $4.1 million. However, Director David Lumpkins purchased 20,000 units for roughly $438,000. We rate CMLP a Hold.

CVR Refining’s (NYSE: CVRR) units gained 6.8 percent in May, following strong quarterly numbers. Annualizing the most recent quarterly payout from the variable-distribution MLP suggests a yield of 14.6 percent at the current price. CVRR is a Buy on dips under $26.

DCP Midstream Partners (NYSE: DPM) received an affirmation of its ‘BBB’ Issuer Default Rating (IDR) and senior unsecured rating from Fitch Ratings. Fitch also affirmed its junior subordinated notes rating of ‘BB+’ and revised its rating outlook from Negative to Stable, predicting that DCP’s balance sheet, which had been under pressure, will continue to strengthen. The ratings will affect roughly $3 billion of DCP’s debt. DPM is a Buy up to $51.

EnLink Midstream (NYSE: ENLC) surged 16 percent in May coming off of a strong quarterly report providing strong coverage for a dividend projected to surge to 80 cents per share for the year.

At the National Association of Publicly Traded Partnerships (NAPTP) conference, management noted strong growth opportunities tied to Devon Energy’s (NYSE: DVN) sponsorship, expected asset dropdowns and expansion plans. The affiliated MLP, EnLink Midstream Partners (NYSE: ENLK), is expected to record adjusted EBITDA of $675 million this year. Dropdowns contemplated over the next three to four years could add $375 million in annual cash. Add #8 Best Buy ENLC on dips below $40.

Enterprise Products Partners (NYSE: EPD) units have climbed steadily in 2014, adding 2.4 percent in May and hitting an all-time high of $76.50 on June 3.

The partnership announced it has loaded the first cargo of refined products for export from its reactivated marine terminal in Beaumont, Texas. The terminal can load up to 15,000 barrels per hour and accommodate vessels with a capacity of up to 400,000 barrels. It’s connected to eight refineries with an aggregate production capacity of 3.3 million barrels per day.

The terminal added improvements such as dredging, new pipelines, vapor recovery systems and new loading arms. EPD remains our #1 Best Buy below $75.

Energy Transfer Equity (NYSE: ETE) units jumped 8.9 percent in May and hit $53.07 on June 4, a new all-time high. During the past month, the company announced it will offer $700 million — up from a previously planned $500 million— of 5.875 percent Senior Notes due 2024, priced at $102 per unit. Management plans to use the proceeds to repay outstanding amounts under its revolving credit facility and for general partnership purposes.  Continue to buy #4 Best Buy ETE under $52.

EQT Midstream Partners (NYSE: EQM) surged 8 percent in May and hasn’t let up since, hitting an all-time high of $89.76 as of June 6. Investors who heeded our advice to acquire the stock in August have gained 95 percent. #7 Best Buy EQM should be accumulated below $70.

GasLog Partners (NYSE: GLOP) made its public debut on May 7 at a 26 percent premium to the IPO price, and after basing near that level for the rest of the month the unit price is now up nearly 9 percent in June as investors latch on to one of the higher yielding growth stories out there. We believe the MLP affiliate of GasLog (NYSE: GLOG) GLOP is be capable of growing its distribution by 15 to 20 percent annually on dropdowns. Recent Aggressive Portfolio addition GLOP is a Buy below $30.

Genesis Energy (NYSE: GEL) sold $350 million in 5.625 percent senior unsecured notes due 2014. The company intends to use net proceeds to repay outstanding borrowings under its revolving credit facilities and for general partnership purposes. The unit price edged up 1 percent in May. GEL remains a Hold.

Kinder Morgan (NYSE: KMI) has regained 5 percent since our upgrade from Hold to Buy on April 22, premised on the improved results delivered recently by KMI’s MLP affiliate Kinder Morgan Energy Partners (NYSE: KMP).

Sentiment got a boost last week when KMI director Sarofim Fayez bought 400,000 shares in the market for a bit more than $13.5 million. That followed founder Richard Kinder’s latest buy in May for $3.2 million. Fayez previously bought the same number of shares in August when the stock was still above $37, so his latest investment may not have much predictive value.

More encouraging is the recent volume buying of in- and out-of-the-money KMI calls well in excess of open interest. July $35s, December $37.50s and December $40s have been bought, and there has also been some action in KMI’s $40 warrants.

The past year’s hazing by critics has left KMI as something of a value play, still yielding nearly 5 percent despite a decent shot at maintaining dividend growth of nearly 10 percent. Few if any MLP general partners still offer a yield this generous. Meanwhile, the growth looks on track. Buy KMI below $37.

Magellan Midstream Partners (NYSE: MMP) MMP’s units jumped 11.3 percent in May following an impressive quarterly report and currently trade at record levels. The partnership’s Longhorn pipeline in the Permian, which contributed to expanded operating margins last quarter, continues to see commitments well above 275,000 barrels per day, its current regulatory approval capacity.

In May, the Magellan also announced it bought a petroleum distribution terminal in Virginia with a 285,000-barrel storage capacity.  Buy #2 Best Buy MMP on dips below $77.

NGL Energy Partners (NYSE: NGL) has returned a quick 12 percent since we added the natural gas liquids, crude and water logistics provider and propane distributor to the Growth Portfolio two months ago.

The latest new high follows news that NGL will acquire from Morgan Stanley (NYSE: MS) the general partner of Transmontaigne Partners (NYSE: TLP), along with a limited partner stake of nearly 20 percent in that MLP, for $200 million in cash, plus $550 million for working capital. Transmontaigne’s crude and refined fuels terminals and storage capacity along the Gulf Coast and across the Southeast looks like an excellent fit for NGL’s rapidly growing logistics network.

Morgan Stanley, which like other investment banks is exiting commodity operations in response to regulatory pressure, appears to have priced Montaigne to move: its limited partnership interest alone has a market price of some $150 million

Meanwhile, the assets NGL already controls continue to deliver excellent results: fourth-quarter EBITDA reported on May 30 came in 10 percent above the partnership’s forecast, supporting  per-unit distribution growth of 15 percent in calendar 2014 and the promise of at least 10 percent in subsequent years. The current yield of 5.1 percent is very competitive given EBITDA growth in excess of 50 percent and the strong 1.5x coverage ratio. Buy NGL below the increased price target of $50.

Oiltanking Partners (NYSE: OILT) announced its board of directors authorized a 2-for-1 split of its common units. Unitholders at the close of business on July 7 will receive an additional unit on July 14.

Units of OILT hit an all-time high of $96.43 on May 19 and gained 4.9 percent for the month despite a late-month pullback after MLV & Co downgraded the partnership to a Hold on valuation ground. Buy OILT below $75.

Regency Energy Partners (NYSE: RGP) announced in early June the sale of 14.4 million common units to ETE Common Holdings, a subsidiary of its GP Energy Transfer Equity (NYSE: ETE), for $400 million. The sale fulfills ETE’s commitment to Regency in support of the latter’s purchase of the Eagle Rock Midstream assets. The unit price advanced 2.6 percent in May. RGP remains a Hold for now.

Teekay LNG Partners (NYSE: TGP) reported total revenues for the first quarter grew 5 percent to $101.5 million. First-quarter DCF increased 12 percent year over year to $60.1 million, or $0.71 per unit. This equated to a 1.02x coverage ratio on its quarterly distribution of $0.6918 per unit.

Cash flow from vessel operations in TGP’s Liquefied  Gas segment grew 12.9 percent to $58.6 million. The increase was due the delivery of two LNG carrier newbuildings in late 2013. Cash flow from the segment grew $6.1 million to $48.1 million. Cash flow from TGP’s Conventional tanker segment saw a drop of 5.1 percent to $12.9 million following the sales of two Suezmax conventional tankers in December and February. Units gained 3.7 percent in May. Buy TGP up to $46.

Western Refining (NYSE: WNR) saw heavy insider selling last month after hitting a 52-week high of $45 on May 6. The largest disposal came from Director Ralph A. Schmidt, who sold 152,029 shares worth roughly $6 million over three separate occasions during the month. Schmidt still controls some 400,000 shares.

Chairman Paul L. Foster sold 100,000 shares at $40.81 to $41.18, worth roughly $4 million. On May 16, six insiders filed to sell a combined 32,449 shares. The price dropped 5 percent in May. WNR remains a buy under $46.

Williams (NYSE: WMB) board of directors approved a 20.6 percent year-over-year dividend increase. The new quarterly dividend of $0.425 per share is payable June 30 to shareholders of record as of June 13. The company also announced it expects to boost its cash dividend by 20 percent annually at least through 2016.

Williams also signaled its intent to “transition … toward pure-play GP holding company,” which would mean dropping down the rest of its directly held assets to MLP affiliate Williams Partners (NYSE: WPZ).

Meanwhile, the US Chemical Safety Board is expanding a probe into safety practices at Williams after a natural gas plant fire caused the evacuation of a Wyoming town in April. This was the company’s third accident in the past 12 months.

Shares hit an all-time high of $47.11 on May 27, gaining 8.5 percent in the course of the month. #5 Best Buy WMB is a bargain on dips below $46.