The strong US dollar has made it tough sledding for the stocks in our International Portfolio, though the recent rally in the Canadian dollar has provided a welcome tailwind for our Toronto-listed holdings.
However, the Aussie remains under pressure because of concerns about slowing economic growth in China and other emerging markets that import natural resources from Australia. (See Down and Out Down Under.)
Although we can’t say whether the Canadian and Australian dollars have bottomed, investors should remember that both countries’ governments remain in much better fiscal shape than our own. And the regulatory environments in Australia and Canada tend to favor energy companies and their investors.
At the same time, traders view these currencies as a proxy for China’s economic growth and appetite for commodities; as long as investor sentiment toward the Mainland’s economy remains negative the Australian and Canadian dollars could remain under pressure.
The silver lining: Investors who take a long view can buy shares of first-rate companies at a discounted price.
Shares of North American refineries have rallied by 30.9 percent since September 2013, while the Bloomberg North American E&P Index, which tracks a basket of 48 exploration and production companies, has given up 4 percent of its value over the same period.
Our commodity outlook for the coming year calls for a downdraft in light-sweet crude oil on the Gulf Coast--perhaps to less than $85.00 per barrel.
The US shale oil and gas revolution has deprived EU refiners of an important export market and ratcheted up competition in South America and Europe.
Despite the recent flurry of mergers and acquisitions announced by Devon Energy Corp (NYSE: DVN), deal flow in the global oil and gas industry has slowed in recent years. In contrast, asset purchases and company takeovers by energy-focused master limited partnerships hit a new high this year and accounted for more than half the transaction value in the US oil and gas industry.
Every month, Roger Conrad and I host an exclusive Live Chat with Energy & Income Advisor subscribers. February's four-hour discussion was particularly lively; we decided to present an excerpt of some of our readers’ most frequent questions and our responses.
The uncertainty surrounding the cross-border leg of TransCanada Corp's Keystone XL pipeline hasn't diminished the company's growth prospects. We examine the investment opportunities behind the controversy.
Buckeye Partners LP rewarded patient investors with a 70 percent total return after resuming distribution growth, while Boardwalk Pipeline Partners LP gave up almost half its value after slashing its payout by 80 percent. These master limited partnerships' divergent fortunes hold important lessons for investors.
Paying attention to the pipeline of prospective publicly traded partnerships gives savvy investors an opportunity to lock in high yields on names that offer the best upside potential.
China- and India-based textile companies are opening new mills in the American South, lured by the promise of reliable and inexpensive energy.
Elliott and Roger on Feb. 26, 2014
Elliott Gue and Roger Conrad’s top energy stocks.
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Our take on more than 50 energy-related equities, from upstream to downstream and everything in between.
Our assessment of every energy-related master limited partnership.
Roger Conrad’s coverage of more than 70 dividend-paying energy names.