In Focus
News flow related to our Focus List picks has been limited in recent weeks, though third-quarter earnings season is just around the corner.
International Review
We break down some of the major themes and opportunities in Canada and Australia’s energy patches, including consolidation in the oil sands, ongoing takeaway constraints in Alberta and restrictions on LNG exports.
Focus Update
The recent rally in upstream oil and gas stocks has bolstered our Focus List.
Power Couple
We highlight two energy companies that offer exposure to secular growth stories outside the oil and gas market.
In Focus
The challenging energy market has taken its toll on our Focus List, with our poorly timed picks from the upstream segment and oil-field services absorbing the hardest hits.
Our lesson from these missteps: We need to remain disciplined and adhere to our own advice about trading these cyclical industries more adeptly, buying when oversold and paring exposure when valuations and sentiment reach the top of their range. These tactical errors are inexcusable and particularly grating when our skepticism toward oil prices at the outset of the year was spot-on.
Upstream Overview: Thoughts on Q2 Results
Within the upstream space, we continue to focus on names with low costs, solid balance sheets, high-quality acreage in the STACK and Permian Basin, and the flexibility to monetize noncore assets or retain cash flow through captive midstream MLPs.
Although our outlook for oil prices and the US energy patch favors an overweight position in core midstream holdings, nimble investors can generate alpha in upstream names by buying when oil prices retreat to the low end of their range and taking some profits off the table when they recover. Timing and stock selection—easier said than done with shorter cycle times—will be critical to producing differentiated returns. Adhering to our Dream Prices can help in this regard.
A Mixed Bag
We review our investment strategy and second-quarter results from the names on our Focus List.
Moving Down the Petrochemical Chain
With the ethylene and polyethylene up-cycle winding down, investors should shift their attention further down the petrochemical value chain.
Focus List Update and Outlook for Energy Stocks
Technical factors suggest that energy stocks could fare better in the back of the year.
Natural Gas: More of the Same
Stepped-up drilling activity and declining break-even costs, coupled with weather-adjusted inventory trends, suggest that natural-gas prices will struggle to remain above $3 per million British thermal units for a prolonged period.
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Live Chat with
Elliott and Roger on Sep. 27, 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
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Elliott H. Gue
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor
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Roger S. Conrad
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor