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Editor's Note: Below is a brief excerpt from today's Early Look written by Energy analyst Kevin Kaiser. Click here to learn more about the Early Look. 

The MLP Heyday is Over, Good Riddance To It - mlp1

The benchmark Alerian MLP Index is down 6% in October alone and is near its lowest level since the energy panic of 1Q 2016.

Investors are starting to see MLPs for what they really are: capital-intensive businesses with mediocre returns on capital operating in a highly-competitive and cyclical industry, with low free cash flow generation, high debt leverage, and, in many cases, atrocious corporate governance.  That’s not a business that should trade at 30x earnings.  MLPs aren’t special.

The MLP Heyday is Over, Good Riddance To It - early look