Enbridge Energy Partners, L.P. (EEP) — I last recommended this master limited partnership (MLP) on Oct. 29, at $37.45, with a trading target of $42.
The company missed Zacks’ consensus estimate for third-quarter revenue and profits when it reported in early November. Sales increased 9% year over year, and adjusted earnings per share (EPS) were up 178%.
Zacks maintains a “buy” on EEP stock, while Credit Suisse (CS
) has an “outperform” rating and $42 price target.
Enbridge’s management is optimistic regarding the company’s long-term growth, saying they expect longer-term projects in 2015 with lower risk. EEP stock has a current yield of 5.7% based on its annual dividend of $2.22 per share.
After consolidating since early 2011 with resistance near $32, EEP stock broke out in June of this year, forming an intermediate trend channel. Shares ran to a high of $40.10 in September before the broad sell-off in energy stocks set in.
EEP stock took a 20% haircut, but the selling was stopped at its major support line (formerly resistance) at $32, where a buy signal from my proprietary internal indicator, the Collins-Bollinger Reversal (CBR), was triggered.
The intermediate trendline was reestablished, and on the second rally attempt from $32 support, EEP stock penetrated its 50-day moving average. The trading channel that began in July/August was resumed, and the CBR flashed another buy signal on Nov. 5, above $34.
MACD is bullish and volume supports a move higher. I reiterate my “buy” on EEP stock and increase my trading target by $2 to $44.
