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  • Roger S. Conrad

Issues

Profit is Apolitical

We assiduously avoid political commentary in the Energy & Income Advisor; subscribers don’t pay us to share our political views. But judging from the sheer number of questions we received about how the recent US presidential election will affect energy stocks, we’d be remiss not to apply the same rational, dispassionate lens that we apply to our coverage universe to the implications of President Obama’s victory.

Every four years, investors must endure a barrage of half-baked articles and sales promotions touting stocks that will benefit if the Republican or Democratic candidate ascends to the White House. True to form, at least two investment banks promoted baskets of stocks that would benefit if Barack Obama retained the presidency and another group that would outperform if Mitt Romney prevailed.

Given the passions that the quadrennial election stoke, these trite stories tend to attract significant attention and, unfortunately, prompt investors to make their fair share of bad decisions.

Trusts and Hedges

There remains a great deal of confusion and misinformation about US trusts and how to value these securities.This misunderstanding often leads to mispricing, giving savvy investors opportunities to buy high-quality royalty trusts at attractive valuations and elevated yields. No two royalty trusts are alike, so investors who sort through filings and quarterly reports can identify the best values.

At the same time, unwary investors who gravitate toward the highest-yielding names with little regard for underlying fundamentals can and will get burned.

We prefer names that are in the early stages of their life spans and have the potential to grow their distributions in the near term.

Just Passing Through

With 47 fund products offering one-stop exposure to energy-focused master limited partnerships (MLP), it’s safe to say that the market has caught on to the appeal of this security class: high yields and low taxes.

But investors’ desperation to find above-average yields in a low-yield world has bid up the prices of many high-quality MLPs to frothy valuations. Despite the recent rally in stocks, the halting US economic recovery and ongoing concerns about the EU’s still-unresolved sovereign-debt crisis suggest that the market hasn’t suffered its last growth scare.

For investors wondering which MLPs they should buy now, the names on our Focus List offer the best combination of value and potential upside.

Start to Profit from the End of Easy Oil

Welcome to the inaugural edition of Energy & Income Advisor, your complete guide to energy investing. We hope you enjoy the new website; we will roll out additional features in the coming weeks, including an absolute-return portfolio and ratings of every publicly traded oil and gas royalty trust.

In this issue, we examine the end of easy oil, one of the key secular tailwinds for the oil-field services sector, and the cyclical trends that are currently driving valuations in the space–namely, the divergent outlook for the North American and international markets.

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

    Elliott and Roger on Jun. 30, 2020

  • Portfolios & Ratings

    • Model Portfolios

      Balanced portfolios of energy stocks for aggressive and conservative investors.

    • Producers and Drillers

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

    • MLPs and Midstream

      Our assessment of every energy-related master limited partnership.

    • International Coverage

      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