Focus List (Mostly) Outperforms and Portfolio Updates
The improved outlook for oil prices and the rotation into energy stocks has lifted most boats in the sector, though we’re pleased that nine of the 13 names on our Focus List have outperformed the S&P 500 Energy Index over an equivalent holding period. We review our Focus List and discuss earnings and other pertinent developments affecting our Portfolio holdings.
Profiting from Key Energy Trends in Canada, Australia and Mexico
We’re less than three weeks into 2018, but several notable trends have emerged affecting the names in our International Portfolio, which primarily comprises positions in Canadian and Australian energy companies. These developments bear watching and will create challenges and opportunities over the next 12 to 18 months.
MLPs: Review and Outlook
We explain why we remain selectively bullish on master limited partnerships in 2018, discuss key opportunities and areas of risk, analyze trends in mergers and acquisitions, and highlight our favorite picks for the coming year.
Positioning the Portfolios for 2018
Many investors’ tax rates will come down in 2018, making the next few trading days your best opportunity for taking tax losses on any underwater positions that may take time to recover. With investors facing higher tax liabilities in 2017 than next year, the benefit of writing off a loser is that much greater.
Of course, we prefer to avoid taking any losses and run the Energy & Income Advisor Portfolios with an eye toward long-run returns. However, given the sector’s recent down-cycle and the topsy-turvy performance of many energy sub-industries over the past few years, we have a few positions that haven’t worked out because of timing issues or a faulty investment thesis. These sales will help to offset the handful of gains that we took over the course of the year.
Focus List: Upgrades and a Value Swap
We swap one value-oriented play on the Permian Basin for one that offers exposure to more near-term upside catalysts.
Surveying the Oil-Field Services Landscape
The tale of two cycles looks set to continue for another year. Drilling activity may have bottomed in the international markets, but pricing pressure will persist until price deflation improves break-evens and upstream operators have more confidence in the outlook for oil prices. Meanwhile, some US exploration and production companies may moderate their spending increases relative to last year, but this short-cycle market remains the best bet for incremental growth and pricing gains in 2018–especially if our call for oil prices to average between $55 and $60 per barrel pans out. Given our preference for US exposure at this point in the cycle, we review the challenges, opportunities and market dynamics in three prominent onshore service lines through the lens of companies’ third-quarter results: contract drilling, pressure pumping and proppant.
Focus List and Portfolio Changes
The recent pullback in midstream master limited partnerships creates buying opportunities. We’ve also added a power company to our Focus List and the International Portfolio.
Lessons from Canada for US Midstream Master Limited Partnerships
Does Canada’s midstream segment provide a model for the evolution of US master limited partnerships? We explore what factors have helped Canadian pipeline stocks outperform despite currency headwinds and lower realizations on oil and gas prices.
Focus List
We have increased our exposure to exploration and production companies in recent months, focusing on names with solid balance sheets and franchise assets that legitimately could live within cash flow. Third-quarter results from these companies were a mixed bag, though their stocks have rallied.
Paradigm Shift in MLP Land
Big changes are afoot in the midstream segment. Many master limited partnerships appear to have taken Enterprise Products Partners LP’s lead and shifted their focus to building distribution coverage and reducing equity. We explore which names will be able to make this transition with relative ease and which names face more of a slog to put themselves on a path to sustainability.
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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
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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