THIS MONTH’S ISSUE
Energy Stocks Soar Again: Now’s the Time to Make a Few Moves
Energy stocks’ remarkable 2022 performance has accelerated again since our last issue of Energy and Income Advisor. The S&P 500 Energy Sector Index is now up a staggering 70 percent plus year to date. The Philadelphia Stock Exchange Oil Service Index has returned nearly as much at nearly 65 percent. And the members of the Alerian MLP Midstream Index are up well over 30 percent, with some still paying yields close to 10 percent. That compares with mid-teens losses and a yield of less than 1.7 percent for the S&P 500, and a nearly -30 percent decline in the technology-heavy Nasdaq 100 that yields less than 1 percent. To put this in starker terms, portfolio managers who divested oil and gas stocks—and didn’t reverse course—aren’t likely to ever make up the losses to their investors. In fact, the longer they wait to get back in, the further they’ll fall behind, as energy supply lags underlying demand and drive prices higher. Energy stocks have also started to outperform the prices of the commodities they produce for the first time in many years. That’s a good sign they’ll beat the broad stock market during the recession and further downturn we expect the ...
Live Chat
with Elliott Gue and Roger ConradOn 11/29/2022
Making Our Moves
Over the past two years, on the monthly chats and via e-mail we’ve received feedback from Energy & Income Advisor readers regarding the actively managed model portfolio. Specifically, given the strong performance of most model portfolio recommendations, many of you have asked us for guidance regarding when to sell – or take partial profits on – some of the names that have performed best. After all, a quick glance at the model portfolio shows supermajor ExxonMobil up a whopping 140% since our initial recommendation in early March of 2020, shares of refining giant Valero up about 136% since recommendation in ...
What’s Important from Energy’s Q3 Data Dump
Last month, we highlighted Q3 results and guidance updates at two Portfolio recommendations: Midstream leader Kinder Morgan Inc (NYSE: KMI) and services giant Schlumberger Ltd (NYSE: SLB). Since then, the rest of the Actively Managed Portfolio and High Yield Energy Target List companies have reported their numbers. And in stark contrast to most of the corporate world, the results and as well as guidance was overwhelmingly straight up bullish for investors. Takeaway number one is this portends very well for how these companies would fare as business in a recession, which we believe is increasingly likely. And continuing conservative levels ...
Endangered Dividends List
Endangered Dividends List companies are vulnerable for one or more of the following reasons: Cash flow coverage of distributions is inadequate. Elevated debt levels with imminent refinancing needs. Revenue pressure triggered by weakness for at least one key asset. Inability to access the equity market on favorable terms to fund capital spending, forcing management to utilize more internally generated cash flow. Exposure to volatility in commodity margins from either rising or falling prices of raw materials. Aggressive general partners anxious to buy in limited partners’ cash flows at discounted prices. Regulatory reversals. Expiring contracts with little hope for renewals ...
Meet Our Editors
Elliott H. Gue
Founder and Chief Analyst
Since earning his bachelor’s and master’s degrees from the University of London, Elliott has dedicated himself to learning the ins and outs of this dynamic sector, scouring trade magazines, attending industry conferences, touring facilities and meeting with management teams.
Roger S. Conrad
Founder and Chief Analyst
Roger S. Conrad has successfully advised income investors since the 1980s, with a nationally acclaimed sector specialty in utilities, telecommunications and energy. He’s a managing partner of Capitalist Times author of Power Hungry, independent director of NYSE-listed Miller Howard High Income Equity Fund and contributing editor to Forbes.com.
