Nine months ago, we surveyed the International Coverage Universe, explained our cautious outlook for the group and set dream buy prices for our favorite Canadian and Australian energy stocks. Although our International Portfolio has taken its fair share of lumps, the approach generally served us well.
At the time, plummeting oil and gas prices forced many upstream operators to slash their dividends. Investors also exited the sector en masse, driving up energy companies’ costs of capital.
We also highlighted several green shoots:
That being said, we also warned that depressed energy prices would necessitate additional dividend cuts and that further weakness in the Australian and Canadian dollars would likely weigh on stock prices.
This challenging environment underpinned our negative outlook for the majority of the names in our International Coverage Universe. We also encouraged readers to set limit orders at dream prices for the Buy-rated stocks featured in the International Portfolio’s conservative sleeve.
To take advantage of the selloff, we added Inter Pipeline (TSX: IPL, OTC: IPPLF) to the International Portfolio’s conservative holdings.
Two additions joined Inter Pipeline a few weeks later:
At the same time, we sought to reduce risk in the International Portfolio’s aggressive sleeve by adding ProShares UltraShort Australian Dollar (NYSE: CROC) as a currency hedge and exiting several riskier names for a loss.
By and large, these moves have paid off. The four aggressive holdings that we sold from the International Portfolio all cut their dividends at least once.
Your complete guide to energy investing, from growth stocks to high-yielders.
In October 2012, renowned energy expert Elliott Gue launched the Energy & Income Advisor, a twice-monthly investment advisory that's dedicated to unearthing the most profitable opportunities in the sector, from growth stocks to high-yielding utilities, royalty trusts and master limited partnerships.
Elliott and Roger on Sep. 30, 2020
Balanced portfolios of energy stocks for aggressive and conservative investors.
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.