Enterprise Products Partners L.P. (EPD) — Shares of this independent natural gas and oil services provider rallied Friday in the face of a vicious broad-based market sell-off.
Enterprise’s services include processing, fractionation, storage, transportation and terminalling. The partnership has a large, diversified asset portfolio of stable, fee-based businesses and a record of increasing distributions. It currently pays annual income of $1.52 per unit for a yield of 5.9%.
Credit Suisse rates EPD stock “outperform” with a $37 price target. In fact, its analysts consider it to be one of the premier bellwethers in the industry and recommend it as a core holding in the sector. They applaud the partnership’s conservative financial management and note that it has gained relative strength during past market down cycles.
EPD stock broke its bear market resistance line on Oct. 2, when it sliced through the 50-day moving average at $27 on very high volume.
I prefer to buy strong stocks on big days down. As I mentioned, EPD stock gained Friday as the market plunged, closing 1.1% higher and triggering a strong buy signal from my proprietary indicator, the Collins-Bollinger Reversal (CBR). The reversal occurred from slightly below the former resistance (now support) line and is a positive indication that shares should be able to successfully attack the 50-day moving average at $26.92. MACD is also oversold.
Buy EPD stock under $25 for a trade to $30 for a potential return of 20%. Shares can also be purchased as a long-term hold for capital gains and their high yield.
