Feature Article

The outlook for our recommendations and coverage universe in answers to five key questions.

Q2 earnings releases for Model Portfolio and High Yield Energy List recommendations are coming up fast. Here are expected and confirmed dates for announcements and guidance calls. We will update between issues if news requires actions, primarily with Alerts.

It’s been a wild ride for oil prices in 2020; however, with the supply-demand picture now becoming clearer, the outlook looks increasingly constructive. On the demand side, the recovery in the US economy appears to be proceeding faster than we anticipated.

Q1 results are in the books and there’s at least a month to go for Q2 numbers and guidance updates. That means relatively little news flow for the companies in our Model Portfolio and on the High Yield Energy List.

In our May 15, 2020 roundtable discussion “Q1 Earnings and Guidance: Here’s What’s Critical” we flagged US independent refiners as a well-positioned group at this stage of the cycle. In this issue, we’re adding Valero Energy (NYSE: VLO) to the Actively Managed Portfolio as a new buy recommendation.

Shortly after the previous issue of EIA went to post, contract renewable energy company Northland Power Inc (TSX: NPI, OTC: NPIFF) concluded Q1 earnings reporting season for Model Portfolio companies with its own solid results. Highlights included a 34 percent lift in revenue, with asset expansion the primary driver of growth. EBITDA advanced 43 percent, net income 35 percent and free cash flow per share by 39 percent from a year ago.

Results and guidance updates are now in across the energy industry, from drillers and producers to pipelines and refiners. We discuss our most important takeaways, and how they’re informing our strategy going forward of accumulating positions in sector survivors to ride the eventual recovery.