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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

Picks, Pans and Takeaways from the 2018 MLP & Energy Infrastructure Conference

As we have for more than a decade, we attended the 2018 MLP & Energy Infrastructure Conference (MEIC) in late May.

This year, we had the occasion to listen to presentations, participate in breakout sessions and one-on-one conversations with senior management at roughly 30 of the largest midstream energy companies in the US.

This week’s issue of Energy & Income Advisor will follow a slightly different format than usual.

During and following the conference, we compared notes and discussed some of our key questions and takeaways from MEIC.

Many of these discussions were recorded and, in this issue, we present an edited transcript of our conversations surrounding 7 key talking points: General takeaways from MEIC, MLP to corporation conversions, the FERC ruling on cost of service rates, US energy infrastructure bottlenecks, our picks (recommendations) coming out of MEIC, our main pans (stocks to avoid).

What Drives Performance for Exploration & Production Companies?

When I analyze any industry group I like to start by attempting to answer one simple question:

What are investors looking for?

In other words, it’s crucial to understand which quantitative metrics and/or stock characteristics drive stock market returns over time. Answer that one question and you’ll be well-positioned to select stocks that outperform their peers and the broader market.

However, these key metrics change over time and nothing drives changes in investor preferences quite like a bear market. That’s certainly been the case for the upstream energy industry in the wake of the big 2014 to 2017 bear market in oil prices.

In the last major energy bull market – leading up to the 2008 top for crude oil – production growth was the most important metric to watch. Companies that grew production the fastest often generated the strongest stock market returns even if growing production required financing via secondary share issuance or debt. And production growth – particularly oil production growth – remained a powerful metric in the 2009 to 2014 era of steady, high oil prices.

However, that relationship has now broken down for good and investors must change tactics accordingly, throwing out the growth-driven playbook that worked so well in the last bull market for energy. Simply put, investors are now looking for a balance between energy producers’ capital spending, free cash flow and production growth.

In this issue, we develop one key metric for analyzing exploration and production (E&P) companies that’s been strongly correlated to stock market returns over the past two years. While investors should never rely exclusively on any single quantitative metric in selecting stocks, we use this research as a starting point to identify some of the best-positioned E&P stocks to buy now as well as a few names to avoid.

What Drives Performance for Exploration and Production (E&P) Companies?

When I analyze any industry group I like to start by attempting to answer one simple question:

What are investors looking for?

In other words, it’s crucial to understand which quantitative metrics and/or stock characteristics drive stock market returns over time. Answer that one question and you’ll be well-positioned to select stocks that outperform their peers and the broader market.

05/31/18: May Live Chat

Elliott Gue and Roger Conrad will host the Energy & Income Advisor’s next Live Chat on May 31, 2018, at 2:00 p.m. ET. This is your opportunity to ask questions about the latest developments in the economy and energy patch.

Reaping the Rewards and Preparing for the Future

The majority of the names on our Focus List have benefited from the recent strength in crude-oil prices, a tailwind that has propelled several stocks above our buy targets—a high-quality problem and a welcome development after the energy sector’s performance last year.

Although we’re glad that our bullish outlooks for oil prices (an out-of-consensus view in the back half of 2017) and energy stocks have panned out, the forward-looking market doesn’t reward self-congratulation and complacency. Accordingly, the big question centers on what will come next for oil prices and energy stocks.

As we noted in the April 30 issue of Energy & Income Advisor, the fundamental backdrop for oil prices appears favorable over the next few years, as recent under-investment in exploration and development outside the US results in a steepening decline rate.

We’ve launched an actively managed model portfolio to help readers prepre for what’s next.

Subscribe today to receive a sample issue of EIA
  • Live Chat with

    Elliott and Roger on Jun. 28, 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

    • Roger S. Conrad

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

    • Elliott H. Gue

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