THIS MONTH’S ISSUE
Q2 Earnings and Guidance: Our Recommendations Show Their Quality
Make plans to join us Tuesday, August 27 starting at 2 pm for this month’s live webchat. You can send us questions in advance to service@capitalisttimes.com. We also invite you to join us at the Orlando MoneyShow, where we’re presenting on Thursday October 17. Hope to see many of you there in person! Thanks for reading.—EG, RC. Year to date the S&P 500 Energy Index is ahead 10.2 percent including dividends. The Philadelphia Oil Service Sector Index (OSX) is basically flat at 0.1 percent on the same basis. And the midstream focused Alerian MLP Index is still leading the sector with a 17.1 percent return also including dividends. The average year-to-date return for the Model Portfolio and High Yield Energy stocks—which are a mix of companies up and down the energy value chain—is 10 percent. Some are trading a bit above our highest recommended entry points. Others, particularly our natural gas-focused producers, are currently unloved. Not surprisingly, it’s energy prices—not interest rates, politics or even company earnings—that are mainly driving sector stock prices. To be sure, our Model Portfolio and High Yield Energy List companies showed their quality in Q2 results and accompanying guidance updates. Even more important, our picks...
Live Chat
with Elliott Gue and Roger ConradOn 09/24/2024
Deep Sector Dive: Top Stock Buys in Energy and Utilities
This week, Elliott and I sat down with MoneyShow's Mike Larson to talk about how plenty of profit opportunities remain for energy investors in both traditional oil and gas stocks, and companies focused on renewable power – and should continue to do so for years. Meanwhile, utilities are quietly dominating the 2024 sector performance race – driven by everything from a friendlier Federal Reserve to AI-fueled electricity demand growth. We start by covering the big-picture environment in the energy and utilities sectors, including why energy demand should hold up despite concerns about China’s economy and why (and by how much)...
Key Takeaways from Q2 Results and Guidance
A few months ago, we highlighted several key takeaways from our recommended energy companies’ Q1 business results and guidance updates for 2024. They were: Solid business momentum for all of our recommended companies. Restrained sector capital spending. Companies are increasingly likely to distribute surplus free cash flow to shareholders especially with share buybacks, than increase CAPEX. Managements continue to prefer mergers and acquisitions as a strategy to grow earnings, rather than risk major new investment in Greenfield development. Midstream re-contracting activity is increasingly robust for operators, as a decade of reluctance to invest in new infrastructure coupled with increasingly restrictive...
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 at...
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.
