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Buckeye Partners Gains from Investments, Regulations a Woe

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On Jan 24, 2017, we issued an updated research report on Buckeye Partners, L.P. . The partnership has an attractive portfolio of refined petroleum product transportation and storage assets in key geographical markets. Further, its strategic acquisitions and organic growth projects will drive the partnership’s performance in the domestic as well as international arena. However, stringent government regulations and are persistent headwinds for Buckeye Partners.

The company has expanded its market footprint through strategic acquisitions. Moreover, Buckeye Partners frequently acquires assets in a similar line of business in a bid to focus on its core business. This trend is evident in the partnership’s signing an agreement to purchase a 50% equity interest in the holding company of VTTI Energy Partners LP for $1.15 billion, in Oct 2016.

Buckeye has a diverse portfolio of refined petroleum-product transportation assets in key geographical markets. The partnership continues to pursue both organic and acquisition-driven growth strategies to expand its scale of operations.

Business conditions for storage remain promising for the partnership’s domestic and international assets. In the third quarter, Buckeye Partners had 18 million barrels of storage capacity in service, up from 14 million barrels in the prior-year quarter.

Price Movement

In the last one year, Buckeye Partners has underperformed the Zacks categorized Oil & Gas-Production/Pipeline MLP industry. During this period, the company’s shares gained 19.7%, compared with the industry’s return of 35.4%.

Zacks Rank & Key Picks

Buckeye Partners currently sports a Zacks Rank #1 (Strong Buy). Some other stocks in the Oil & Gas-Production/Pipeline MLP include Enable Midstream Partners, LP , Enbridge Energy Management, L.L.C. and Plains All American Pipeline, L.P. (PAA - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Enable Midstream’s2017 estimates inched up 2.5% to 83 cents from 81 cents inthe last 60 days. Its units gained whopping 125.4% in the last 12 months, outperforming the broader industry.

Enbridge Energy’s2017 estimates increased 7.1% to 75 cents from 70 cents inthe last 60 days. Its units gained 78.7% in the last 12 months, outperforming the broader industry.

Plains All American’s 2017 estimateswent up 6.4% to $1.84 from $1.73 inthe last 60 days. Its units gained 56.2% in the last 12 months, outperforming the broader industry.

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