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Elliott Gue knows energy. Since earning his bachelor’s and master’s degrees from the University of London, Elliott has dedicated himself to learning the ins and outs of this dynamic sector, scouring trade magazines, attending industry conferences, touring facilities and meeting with management teams.

Elliott Gue’s knowledge of the energy sector and prescient investment calls prompted the official program of the 2008 G-8 Summit in Tokyo to call him “the world’s leading energy strategist.”

He has also appeared on CNBC and Bloomberg TV and has been quoted in a number of major publications, including Barron’s, Forbes and the Washington Post. Elliott Gue’s expertise and track record of success have also made him a sought-after speaker at MoneyShows and events hosted by the Association of Individual Investors.

Elliott Gue also contributed chapters on developments in global energy markets to two books published by the FT Press, The Silk Road to Riches: How You Can Profit by Investing in Asia’s Newfound Prosperity and Rise of the State: Profitable Investing and Geopolitics in the 21st Century.

Prior to founding the Capitalist Times, Elliott Gue shared his expertise and stock-picking abilities with individual investors in two highly regarded research publications, MLP Profits and The Energy Strategist, as well as long-running financial advisory Personal Finance.

In October 2012, Elliott Gue launched the Energy & Income Advisor, a semimonthly online newsletter that’s dedicated to uncovering the most profitable opportunities in the energy sector, from growth stocks to high-yielding utilities, royalty trusts and master limited partnerships.

The masthead may have changed, but subscribers can expect Elliott Gue to deliver the same high-quality analysis and rational assessment of investment opportunities in the energy patch.

Articles

Top of the Pops

With third-quarter earnings season in the bag for much of the energy patch, we take advantage of the sudden break in the action to assess where we stand today and highlight the names that offer the best risk-reward propositions over the next 12 months.

The bulk of these picks hail from the upstream (oil and gas production) and midstream (pipelines and processing) links in the energy value chain–the two areas that stand to benefit the most from a modest recovery in oil prices.

One of the major themes that we’ve highlighted over the past year focuses not on trends in overall US oil production, but rather the low-cost shale plays that stand to take market share in an environment where energy prices remain lower for longer.

This analysis has informed our positioning in the upstream segment, with the high-quality exploration and production companies that we added to our model portfolio in January 2016 up an average of 80 percent over the subsequent months.

Our selection process targeted names with strong balance sheets, low production costs, a history of solid execution and franchise assets that can deliver output growth in a challenging environment. With oil prices a point of pain or profit for all upstream operators, names that can deliver on a volumetric growth story and take market share should outperform.

We continue to like our picks from earlier this year as solid holdings for 2017. But all three trade above our buy targets, while a handful of names that the market perceives as being a notch lower on the quality scale could offer superior upside potential in the new year.

Although the market continues to throw capital at any upstream name with significant exposure to the red-hot Delaware Basin, some midstream names that play in this field and the emerging STACK play offer high yields and significant upside potential.

Filtering the Earnings Deluge

Third-quarter earnings season is in full swing for the energy sector, providing a deluge of data and information to sort through and analyze.

As always, we approach this quarterly exercise with an eye toward identifying emerging opportunities where the risk-reward balance skews in our favor and checking up on the existing holdings in our Model Portfolios to make sure our investment theses remain on track.

Upstream Takeover Targets

Some of the biggest winners from mergers and acquisitions activity in the US upstream space have been the acquirers. Deal flow will continue to focus on assets and private-equity outfits monetizing their investments. We prefer names with solid balance sheets and exposure to franchise assets with low production costs; these names will continue to take market share, outperform their and grow their inventories of potential drilling locations.

Let’s Make a Deal

Merger and acquisition activity involving oil and gas companies has declined by about 19 percent from year-ago levels, based on the total value of the deals announced thus far in 2016.

North America remains the most active market, with about 61 percent of the targets and 69 percent of the buyers calling the region home.

With all the upheaval in the global energy patch, many oil and gas industries are ripe for consolidation, especially the hardest-hit portions of the value chain.

However, our long-standing rule of thumb when playing potential takeover targets is to focus on names that offer exposure to a compelling upside story; even if a deal never materializes, our position should appreciate in value.

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  • Live Chat with

    Elliott and Roger on Sep. 27, 2018

  • Portfolios & Ratings

    • Model Portfolios

      Balanced portfolios of energy stocks for aggressive and conservative investors.

    • Coverage Universe

      Our take on more than 50 energy-related equities, from upstream to downstream and everything in between.

    • MLP Ratings

      Our assessment of every energy-related master limited partnership.

    • International Coverage Universe

      Roger Conrad’s coverage of more than 70 dividend-paying energy names.

    Experts

    • Elliott H. Gue

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor

    • Roger S. Conrad

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor