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1/29/26 Capitalist Times Live Chat

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Roger Conrad

4:49

Hi Jim. Sorry about that. As you've noticed, we've simplified the website and there are a few bugs. Appreciate your patience.

As I said answering Arthur, Lyondell has a pretty big day coming up tomorrow with Q4 results and guidance--I expect we'll get clarity on the dividend as well as the overall business. It's a cheap stock here and my feeling is I'll probably want to take a new position in the stock once results are in. If that's the case, I'll have an update out with the recommended trade.

Roger Conrad

4:52

I would not expect another increase of that magnitude next year. The dividend boost follows the interim rate increase granted by California regulators as they deliberate the company's 2026-28 rate and investment plan. And it's a good sign the negotiation is going well.

Alex M.

4:52

Hi Roger. What are your thoughts on CWT? It just issued a large 11%+ dividend increase. Thanks.

Roger Conrad

4:54

Sorry to put the answer before the question on that one. To complete my answer to Alex, California Water is a solid utility. And provided the rate case continues to go well, it faces few risks. It's not a cheap stock--even after the dividend boost the yield is barely 3%. But it is a very low risk investment and a buy at 40 or less.

Elliott Gue

4:57

Had a couple of questions here in my e-mail queue: I recently subscribed to your CT Trader notices.... You recently recommended BTU, but I didn't see a reason for the recommendation. What is the reasoning behind it?
It would be very helpful, going forward, if you could just give us a very brief explanation of your thinking behind your recommendations.... It doesn't have to be long, It could be just a few sentences.... It would be very helpful to us in making a decision as to whether to follow your recommendation.

Answer: Thanks for the question. Peabody Energy (BTU) is a coal mining firm. Traditionally, they produced steam coal (coal for power plants) out of the Powder River Basin (PRB). They still do that and it’s a cash cow for them, but their main focus is now “met” coal out of Australia – this is coal used to make steel.
BTU is fundamentally one of the better coal plays and it’s a name I track pretty closely. The stock ran up to a high in mid October and then pulled back and traded in a tight range under $31 to $32 from mid-October to early January. We recommended the stock as a trade in CT Trader on January 8th, just as the stock was breaking higher from that tight range.
Generally, this is one swing trading set-up I look for in CT Trader. Stocks in an uptrend that pull back and consolidate in a tight range. Typically, these ranges ultimately resolve in the direction of the underlying trend (higher in this case).

Dave

4:58

Hi Roger -- wanted to ask you about Chord Energy. When the Enerplus acquistion occurred back in June 2024, Chord shares were trading above $170. Could I ask for your thoughts about the primary reasons for the decline in share price since then? Is Chord a quality company in your view? Is there a path for share price appreciation from here with Chord? Thanks very much!

Roger Conrad

4:58

Hi Dave. I think Chord is a quality company with low cost production and consistent success reducing drilling costs. What happened to the stock closely corresponds with what happened to oil and gas prices--which basically took to zero what had been a substantial "variable" portion of the dividend. We'e also seen bearish sentiment on the Bakken, where Enerplus' reserves are. But I think fundamentally this is a stock that will ride energy prices. And if oil especially strengthens from here as we expect, so will CHRD shares.

Elliott Gue

4:58

In this case, BTU broke higher, through its October peak around $36 to near $40. It’s pulled back to about $36, holding support at the October peak, and we’re still looking for an additional move to the upside from here.
Basically, as with most of our trades, our trading recommendations rely more heavily on technicals (the charts) than for our longer-term services like EIA.
On any given trading day I am usually monitoring 50 to 100 tickers that look interesting as potential trades. Many names I know well because I’ve recommended them or followed them as part of my research for the other services (that’s the case with BTU). In other cases, they’re names I’m following based on some trade set-ups I look for -- for example, our trade in REAL in September-October was a “short squeeze” idea.
In many cases I have alerts set up to tell me if a name crosses a particular level and, of course, I watch names around their earnings releases/news. I also run through a long list of these stocks a few times each trading day

4:59

When one of theses ideas “triggers” I generally prioritize getting the idea out there as quickly as possible, which is why we typically send the one-line recommendations.
In this case, you could still have entered BTU the next day under our target price of $33, but it moved up pretty quickly once that technical trigger flipped.
I generally try to give a more detailed analysis of the recos in the subsequent updates we send out but the actual trades are often motivated by short-term technical triggers in the stocks I follow. I will definitely try to be more thorough in terms of follow-up analysis of trade recommendations – but the main reason for the short buy-sell alerts is to prioritize speed.

Guest

5:02

Hello Roger: Can you speak on the attraction, if any, on WES as a long-term holding? I believe for a few years you were not recommending WES. I was shocked to see that its dividend payout has been so remarkable the last 4 years (kind of like MPLX). It has gone from $1.27/share in 2021 to $1.83 in 2022 to $2.49 in 2023 to $3.20 in 2024 to $3.61 in 2025!!!! How do we know if WES is a prudent purchase? How do we know if WES will continue to increase its dividends by greater than 10%? Your thoughts? Thanks. Barry

Roger Conrad

5:02

Hi Barry. I added Western Midstream to the High Yield Energy List last year for three main reasons. (1) The dividend yield is high (nearly 9%) and well covered with cash flow. (2) it's primary owner and largest customer Occidental Petroleum has returned to a strategy of expanding rather than limiting production, which means the potential for expanded throughput on the existing system with expansion opportunities and (3) it's now a leading water player in the Permian after several major acquisitions.

Since we entered the position, it's been profitable. I haven't raised the entry point past 40. but I may depending on what they report for Q4 next month and what the dividend is raised to for May.

Elliott Gue

5:06

Q: ANET hasn’t gotten a boost in the market. It is down -17% so far. Should I cut my losses, or are you expecting an upside?

5:07

Answer: ANET basically makes high-speed networking equipment used in AI data centers. Technology has lagged the broader market since late October. While the average stock was up 5% to 6% in the S&P 500, the overall index was flat because tech has such a heafty weight. My view is that ultimately, technology stocks may not lead but they will participate in the broader rally – a sort of “catch up” to the rest of the market. We’ve seen this happen a few times since 2022. ANET has started to move higher and is now back above where we recommended it late last year. I continue to expect the stock to exceed its 2025 peak and I continue to recommend the stock in the model portfolio as a buy under $ 150.

5:25

1. Can we get a list of all open trades for CT-Trader? Not just the "fresh money" buys highlighted at the top of the alert? Thanks!

2. With respect to what looks like the commodities supercycle currently unfolding - and nicely written up in the latest Energy and Income Advisor - do you see trades in other commodities, beyond energy and BHP in Roger's Income portfolio, and CX, SLV, and WPM in the ATR portfolio? In the past, Alcoa was a recommendation (back when you were covering metals) - I'm curious if you see other good metals plays given the run-up we've seen.

3. What signs will you be watching for a peak in the commodities supercycle?

Let me answer those questions in turn:
1. Sure, I will look to start adding a list of all open recommendations, including those we only recommend “holding” at the end of the updates, at least a couple of times each month.

5:26

1. Yes, generally, in a commodities supercycle all commodities participate to a degree. In CT Trader we have a recommendation in Hudbay, a copper play, that’s done well though it’s now well above our buy targets. And in my Total Return model portfolio, I had a recommendation in Corteva (an agricultural commodities play) for a while last year – we sold for a profit because I was worried about corn prices into the autumn. However, I am actually turning more bullish on some of the agriculture names, including CTVA, once again. A lot of the metals plays are now looking extended, I tend to think that we’ll see some rotation into energy and maybe agriculture through the year as these play “catch up” to the precious and base metals.

1. The peak of a supercycle is usually about supply and sentiment. In the 2012-14, for example, rapid growth in shale production was putting downward pressure on oil prices. The Saudis were neutralizing that by restricting their own exports. When they stopped doing so in late 2014, prices collapsed. We started to “pick up” some signs of this building oversupply in 2013-14, which we wrote about in EIA at the time. For example, we started to hear about major producers pushing back on dayrates they were willing to pay for deepwater rigs. Also some comments about very strong shale supply growth in the earnings calls. Sentiment is a little harder to measure but I remember vividly going to an energy conference in Jacksonville where everyone was just too excited – I remember sitting in the back of a room listening to some young analysts from New York talking about all the growth in proppant sand and a new MLP that focused on this market. At that conference there was an open bar complete with high-end bourbon

5:28

tasting, a prime rib buffet and a PGA pro doing driver demonstrations. It felt a little too much like peak Rome for my taste. I would say we’re a long way from that level of bullish sentiment right now. You have people openly talking about $30 oil, the energy “transition” that never happens, and in my experience you now have to pay your own tab at energy conferences.

Frank

5:31

I think I remember that Newmont at one point had guided to distributing free cashflow to special dividends above their base dividend and buybacks once the debt was reduced. Well now it looks like they're debt-free, and their projections, like all miners, never took into account $5500 gold, setting them up for a cascade of earnings. Could this happen and turn this into a income play?

Roger Conrad

5:31

Hi Frank. That's actually been my thought for a while. Management up to now has expressed clear preference for buying back stock, rather than raising the base dividend or restoring some variable rate payout. But buybacks at $125 plus don't add a lot of value in my view.

They're going to announce Q4 results and guidance on Feb 19. The impact of $5K gold isn't going to show up right away, since output is pre-sold and prices are hedged. But we should see a big expansion of margins--both on price and on cost as management continues its streamlining plan. And that will provide plenty of room for a larger cash payout.

I have no idea if they'll go that route. And I'm still considering selling another piece of NEM. But the stock still looks more priced for $3,500 than $5K plus prices.

Alex M.

5:36

Are you seeing any opportunities in the consumer staples space with names like KMB and CLX? Thanks.

Roger Conrad

5:36

Kimberly-Clark actually looks pretty interesting yielding 5% plus and with a dividend increase ahead in April. For disclosure, I own it in an account. Clorox does as well. These companies have the balance sheet strength to make acquisitions to put them in better shape when the cycle turns more positive, And they're not expensive.

I'm not making a recommendation for any of them at this time. But they're on the list of stocks I'm considering for Dividends.

Guest

5:42

Roger: How do we choose between PAA and MPLX with their attractive 10%-12% annual dividend increases and ET and EPD with their modest annual 3-4% increases? I am perplexed!!!! Please advise as to how you work through which companies to buy, I am biased and have been allocating new purchase money toward PAA and MPLX. Your wisdom and objectivity would be appreciated. Thanks. Barry

Roger Conrad

5:42

As you know, I like all four of these midstream MLPs. Plains All American Pipeline/Plains GP Holdings and MLPX pay the higher yields and continue to grow distributions faster. But Energy Transfer and Enterprise are much larger and more diversified than Plains, which is still much more volumes sensitive. MPLX has the complication of being owned by Marathon Petroleum--which at this time seems content to collect rising dividends but at one time was considered a threat to "take under" the business. I think all of them are going higher. But I really do prefer owning all of them to picking one over the other. And MPLX is now more than 10% above our highest entry point--EPD is slightly above.. I may adjust those targets depending on Q4 results the next couple weeks. But at this point, only ET and PAGP/PAA rate buys at current prices.

Sal P

5:45

Afternoon Elliot / Roger In reading through todays news letter , I noticed Kinder Morgan has a take some profit at $30 which we have on reached today . Are we on course to do so ? These chats are much appreciated .

Roger Conrad

5:45

Hi Sal. As I answered in an earlier question, I'd be inclined to raise the profit taking price to 35 after what we saw in Kinder's Q4 results and guidance. But anyone overweighted and with a particularly big gain may want to take a little money off to put in a midstream with a higher yield. And I believe MLPs right now are a much better bargain than the midstream C-Corps--really a role reversal from 2013-14, when C-Corps were under huge pressure to go MLP because MLPs. traded at hefty premiums.

Jon B

5:51

Hi, thanks for the chat. 1) Wondering what your thoughts are on Nisource. Highly valued, but expectations for growth over the next few years seems to be rising. Also, 2) Essential Utilities seems to be out of favor, weighed down by the price of American Water. What is holding these stocks back? And finally, 3) I can't seem to find the utility or energy report cards online any more - has this feature disappeared? Thanks again.

Roger Conrad

5:51

Thanks Jon. First off, the Utility Report is not disappearing. As you've noticed, we've simplified the website for CUI. And in the process, unfortunately, there have been a few glitches--which are being fixed. That goes for the EIA tables on the EIA site as well. I appreciate your patience.

Regarding NiSource, it's a very strong utility trading at a high price--yield less than 2.7% and 24X earnings. My view is management has the company well positioned for strong earnings and dividend growth with low risk. But I'd like to see a price of 40 or less before recommending anyone buy, other than through a DRIP (dividend reinvestment plan).

I think a little patience now with Essential and American Water will pay off big time the next few years. Both companies have consistently grown earnings and dividends with system investment and acquisitions in recent years. And joining forces will greatly enhance the combined company's ability to grow. Water utilities have seen their premium to other utilities shrink

Roger Conrad

5:52

And that combined with higher for longer interest rates has diminished appeal in the near term. But these are two very high quality companies joining forces. And as they move toward a close this year, I expect that to show up in higher share prices.

Shell

5:56

What is your take on the precious metals? Would now be the time to take some profits in some of the mining stocks and/or precious metals mutual funds or ETF,s? They could drop as fast as they rose.

Roger Conrad

5:56

Hi Shell. We've had a pretty vigorous discussion of precious metals in this chat. My view as I've said is it's time to manage positions a bit. In CUI Plus/Dividends Plus, my biggest gainer over the past year has been Newmont Mining. I've taken a profit on one-third the position--and I'm currently considering taking profit on another third.

I think gold stocks in general aren't priced for $5K plus gold but for something like $3,500. The longer gold just stays up here, the more they're going higher. But i agree with your premise that we've made a lot of money already. And gold is up here not on actual inflation but inflation expectations--which could shatter if say the president appoints a Fed chairman with inflation fighting bona fides. We don't know if he'll do that. But managing positions will lock in some of our gain and we can ride the rest.

Jim T

5:59

Last fall you opined that sometime early this year might be a good time to buy BHP. Have we reached that point or should we delay until later this year.

Roger Conrad

5:59

Hi Jim. I've been recommending BHP Group pretty consistently for some time. The price of the ADRs traded NYSE (2 ordinary shares) is up 20% already this year nad getting close to my highest recommended entry point of 75. But I see this as a 100 plus stock eventually.

It's the world's leading resource company. And it's positioned to grow in the most important resources, iron ore, copper and starting in a couple years potash.

Jim T

6:07

What is your latest recommendation on Venture Global and do you have a chronological list of important events coming up in this quarter?

Elliott Gue

6:07

We still have VG as a buy under $13. The main catalysts for VG will be related to arbitration rulings this year. They won an arbitration against Repsol this month, settled another one late last year and won an arbitration against SHEL (which SHEL is now trying to overturn in a NY court). They lost an arbitration against BP and still have some more pending. So, what we're waiting for is the damages from BP, which we believe could be less than the market fears and the other arbitration ruling. These are likely to be by spring sometime but it's tough to get more specific than that. Our view has been VG stock more than priced in the worst possible outcome following the BP loss last year. Now, the stock has rallied because they won against Repsol and estimates for the scale of any award for BP damages have come down. It's rare for courts to reverse arbitration rulings as SHEL is asking them to do but not unprecedented. However, I think the biggest uncertainty to resolve is the BP damages, which we should get by

Elliott Gue

6:07

this spring.

Tommy L

6:08

What is your take on EIX now that time has passed and we are in a new year? The question really is, what is the upside potential in the next year?

Roger Conrad

6:08

Hi Tommy. The timing is really out of the company's hands--as it depends on regulatory and court proceedings, as well as the still undisclosed results of the Eaton Fire investigation.

But I think Edison's full recovery to an $80-$90 share price is only a matter of time. First, under California law, it would only be liable for about $4 bil of damages if its equipment is found to have caused the Eaton Fire and it is found guilty of negligence. The second part of that is much harder than the first. But even then, the company would be able to securitize the cost and recover over time in rates. Meantime, it's paying claims under the Wildfire Recovery Compensation Program--reducing the number of claims in court against it.

Second, the state of California is squarely behind its CAPEX plans to increase system resilience and electrify the state economy. That's locked in 6-8% annual earnings growth from a P/E of barely 8X.

And third, the yield is 5.6% and the dividend is growing 6% a year. Buy up to 65.

Guest

6:16

A popular energy podcast describes E&P companies as “deflationary price takers”, that refers to a business or entity that must accept the market price for its goods or services, which is decreasing due to deflation. This means they cannot influence prices and must adjust to the lower prices set by the market, often leading to reduced revenues and potential financial challenges. He recommends avoiding those businesses in general. How would you respond?

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