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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

Energy 2019: Auspicious Beginnings

The energy sector rally that began in the last days of 2018 has continued into early January. The long-suffering Alerian MLP Index is 15 percent higher than its post-Christmas Day low. The S&P 500 Energy Index is better by almost 14 percent, as is North American oil benchmark WTI Cushing.

Natural gas by the Henry Hub benchmark is flat after plunging more than one-third last month. But by and large, buyers are pushing up prices of energy stocks, including many of the higher yielding fare that took the biggest hits in late 2018.

Is this a rally with legs? Or will it prove to be just a bounce in a continuing decline?

That’s the big picture question we address in this issue’s Roundtable discussion. As the headline of our previous Energy and Income Advisor indicates, this is not 2014. And there are several encouraging signs that the energy sector has not only bottomed, but will be a strong outperformer in the New Year.

Certainly not every sector stock will prosper. For example, since our last EIA issue, two Endangered Dividends List members have eliminated distributions. And a company third is set to do the same later this month.

With North American oil and gas drilling activity expected to wane in the first half of the year, the door to accessing capital markets on economic terms remains slammed shut in the faces of all but the largest and strongest energy companies. That’s forcing companies up and down the energy value chain to self-fund virtually all capital spending, and in many cases debt refinancing as well.

The good news is four and a half years after oil cracked under $100 a barrel, the survivors of this battered industry are doing the job. Shale focused producers will adjust output with price swings. But the big capital investments continue to move forward, driving sector earnings and dividend paying power.

The only question is when a critical mass of investor dollars will flood back to the energy sector. We believe what we’ve seen so far presages a solid 2019.

Energy 2019 Roundtable

Q: Why will the energy sector outperform in 2019? Will it matter if the overall market has a bad year?

Roger Conrad (RC): In my experience, no sector can wholly withstand an overall market meltdown, particularly if it brings a recession with it. And as if we needed a reminder, the last four plus years have shown quite clearly that energy is a cyclical business.

That said, the economy’s still growing by any useful measuring stick. This remains one of the slowest tightening cycles for the Federal Reserve I know of.

Our Deep-Dive Outlook for Oil

Since the end of September, WTI and Brent oil prices have experienced one of the most violent and rapid sell-offs in history.

Over the short term, energy stocks typically follow commodity prices particularly on the downside. Thus, the S&P 500 Energy Index is off 19.6% this quarter, the Alerian MLP Index is down about 12.8%, the SPDR Oil & Gas ETF (NYSE: XOP) is down 34.8% and the Philadelphia Oil Services Index (OSX) has plummeted over 40% led on the downside by the deepwater and onshore contract drillers.

Focus on MLPs: Still a Table Pounding Buy for the Patient

Six months ago, we returned from the 2018 MLP & Energy Infrastructure Conference with a full head of steam. Our most important takeaway: MLPs’ fundamentals and technicals were improving at the same time investor sentiment appeared to have sunk to a new low.

Our conclusion was we had a table pounding buying opportunity on our hands for the best MLPs. We highlighted the specifics in our June 15 roundtable “Picks, Pans and Takeways.”

Since then, MLPs staged a mild summer rally, only to give it all up and more in the autumn selloff following oil prices lower. But the underlying business fundamentals have continued to improve, especially for the sector’s best in class.

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  • Live Chat with

    Elliott and Roger on Jan. 29, 2019

  • 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