Over the past year, we’d taken some steps to reduce the Portfolio’s risk, cashing out of SeaDrill (NYSE: SDRL) last fall and selling fracking sand specialist Hi-Crush Partners LP (NYSE: HCLP) for a roughly 60 percent gain. We also reiterated our Sell call on SeaDrill, a stock we first highlighted in 2007, on several occasions this year.
By design, our Model Portfolios also feature less exposure to oil and gas producers than many energy-focused investment advisories, though we should have lightened up our exposure to riskier, high-yielding names earlier this year.
With only a few exceptions, our Model Portfolio, MLP Portfolio and International Portfolio’s conservative allocations have delivered solid returns and held their value better than most.
This resilience reflects our overweight positions in conservatively run midstream operators—many of which are organized as master limited partnerships (MLP)—that have little direct exposure to fluctuations in oil and other commodity prices.
Our primary hedge against weaker oil prices has delivered a total return of almost 80 percent since we added the stock to the Model Portfolio in January. Equally important, this stock has rallied 44 percent since we highlighted the pick as one of our top demand-side bets in the Oct. 17 issue, Picking the Pockets of Opportunity.
Although we’ve made a lot of right moves, our Portfolios’ aggressive allocations have taken some serious, making us wish we had booked profits more aggressively at the top.
That being said, it’s not too late to position your portfolios to thrive over what promises to be a challenging six to 18 months.
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 Dec. 31, 2019
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.