gettinthere/iStock via Getty Images Units of MPLX ( MPLX ) have been a solid performer over the past year, gaining about 10% while also paying an 8% distribution. The past year was a transitional year for the partnership, with it investing significantly to expand operations, and we should see the benefit to cash flow this year. While the Iran War has created volatility in the sector, I see limited...
gettinthere/iStock via Getty Images Units of MPLX ( MPLX ) have been a solid performer over the past year, gaining about 10% while also paying an 8% distribution. The past year was a transitional year for the partnership, with it investing significantly to expand operations, and we should see the benefit to cash flow this year. While the Iran War has created volatility in the sector, I see limited impact in the near term for MPLX and a net positive over the long term. I last covered MPLX in January , rating the stock a “buy,” and since then it has returned about 7%, exceeding the market’s 3% gain. Units had been up even more strongly, approaching my $60 price target before giving back some gain over the past three weeks. With a rapidly shifting macro environment for the oil complex, now is a good time to revisit MPLX. Seeking Alpha As a logistics and transportation business, MPLX does not have direct exposure to commodity prices, instead earning a fee for transporting and storing oil and gas. As I will discuss below, I see the conflict potentially enhancing long-term growth in its gas operations, but the near-term impact will be quite muted. The same is also likely true of its oil and refined product business. One interesting point to track is that US oil inventories had been rising, and I expect this to reverse as there is likely to be a surge of US exports to replace some lost Middle East production. However, we are highly unlikely to experience any supply shortages (which could occur in some Asian markets if the Strait of Hormuz remains closed for longer) given domestic production levels and current storage buffers. EIA Separately, I would note that as of year-end , Marathon Petroleum ( MPC ) owned 647 million units, or 64% of the MLP. These entities have a symbiotic relationship with MPLX’s oil infrastructure, closely linked to MPC’s refineries (95% of refined product transportation is for MPC). Importantly, Marathon is a strong entity , making it a sound counte...
South Korean stocks have erased the slide triggered by the Iran war, driven by a rally in chipmakers as escalating US–Iran tensions bring the artificial intelligence trade back into investor focus. The Kospi climbed as much as 1.2% Monday to more than 6,200, with memory firms Samsung Electronics Co. and SK Hynix Inc. the biggest boosts. The benchmark is up nearly 50% this year, making it one of th...
South Korean stocks have erased the slide triggered by the Iran war, driven by a rally in chipmakers as escalating US–Iran tensions bring the artificial intelligence trade back into investor focus. The Kospi climbed as much as 1.2% Monday to more than 6,200, with memory firms Samsung Electronics Co. and SK Hynix Inc. the biggest boosts. The benchmark is up nearly 50% this year, making it one of the world’s best-performing equity markets. Korean shares have mounted a sharp turnaround from the early days of the Middle East conflict, when surging oil prices triggered a historic selloff in the energy import-dependent market and pushed it to the brink of a bear market. Since then, sentiment has stabilized on fundamental improvements across semiconductor and industrials, prompting Goldman Sachs to lift its Kospi target to 8,000. South Korea’s “equity market is fundamentally driven by global semiconductors and investment in power infrastructure and defense, rather than episodic geopolitical or energy shocks,” said Gary Tan , a fund manager at Allspring Global Investments. “With memory pricing still elevated and global AI and power‑related capex remaining robust, Korean equities should stay well supported into year‑end.” SK Hynix shares jumped as much as 3.4% on Korea Exchange ahead of its earnings this week, after saying it has begun production a next-generation memory module designed for Nvidia’s Vera Rubin platform. It plans to closely collaborate with Nvidia to solve bottlenecks in AI infrastructure and provide optimal performance. Samsung Electronics’ results earlier this month provided some reassurance for investors. The chipmaker posted an eightfold jump in quarterly profit, underscoring robust demand and allaying concerns that the US‑Iran conflict would dent spending on AI hardware. “Korea and Taiwan have benefited from strong earnings momentum in their technology sectors,” said Jarrid Klug , senior equity portfolio manager at DWS Group. “Growth in other regions has...