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NuStar Energy L.P.

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NuStar Energy owns a high-quality, large and diverse asset portfolio. Other positive attributes include its investment grade rating and strong track record for distribution growth. We also appreciate the partnership’s expectation of a year-over-year earnings increase from its major segment in 2015 amid increased throughput volumes and recent acquisitions. Finally, NuStar’s fee-based transportation and storage assets make it less susceptible to commodity price weakness.  However, we believe these positives are already reflected in its current valuation, so there is not much upside for the stock. We are also concerned about the partnership’s high leverage. As such, we see NuStar units performing in line with the broader market.

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