With the landscape changing for pipeline operators recently, Jim Cramer made a bold call for investors to circle back to these stocks.
"With oil prices back in the $50s and U.S. production set to rise dramatically next year, it is time to circle back to the pipeline plays, and right now my favorite one is Magellan Midstream Partners," the "Mad Money" host said.
For ages, Cramer has advised investors to stay on the sidelines for pipelines, which act as a toll road for oil and gas transportation. When energy prices fell, many players encountered less use, a loss of pricing power and eventually many companies had to cut their dividends, which eliminated the exact yield that make many master limited partnerships (MLPs) so attractive to investors.
To make matters worse, the dividend cuts meant that MLPs became bond market equivalent stocks, and were hammered mercilessly in anticipation of an interest rate hike by the Federal Reserve.
Suddenly, the playing field has changed for MLPs. First, Donald Trump won the election, and it looks to Cramer that the president-elect will be very pro-petroleum and pro-pipeline.