While the market continues to march higher, with the S&P 500 repeatedly hitting new all-time highs, there is at least one subsector of the market that is greatly undervalued compared to where its stocks have traded historically. That would be the energy midstream sector.

Even better, the midstream industry as a whole is in much better shape today compared to a decade ago when the stocks in it traded at much higher valuations. Let's take a look at the dynamics of the industry and some stocks in the sector that look poised to outperform over the next several years.

While the companies in the midstream space are best known for their pipeline assets, they perform a variety of tasks in the energy complex. This ranges from gathering crude and natural gas at the wellhead to separating the hydrocarbons (such as processing and fractionation) to providing water delivery and disposal (fracking requires a lot of water). It also manages storage, long-haul transport, marketing, compression, and other services.

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Source Fool.com