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10/29/25 Capitalist Times Live Chat

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Arthur

2:47

Please discuss the Real Real and Lemonade. Where do you see them going? Any targets or just hold them for a while and see what happens.

Thank you

Elliott Gue

2:47

Both REAL and LMND are stocks we recommended in the CT Trader trading service. REAL we initially recommended on September 8th at a price of roughly $8.46. We then recommended selling half the position at $11 on September 26th for about a 30% total gain. Now REAL sells for $12+ and we're recommending you hold on to the remaining position in the stock for now. The company does report earnings on November 10th, so we may make a move by then. However, the next obvious resistance levels are up around $17 and REAL has hefty short interest, so we see the potential for a short squeeze that propels the stock up to that level eventually. LMND we recommended in late September at $54.52 and it touched $62 this morning though it's off those highs now. It's another example of a heavily shorted stock that's had a nice run of late. On a closing break over $62 or so, we can see this stock getting back up to the mid $70s. For now, we're just holding the full position in the trading portfolio though we may make a move ahead of

Elliott Gue

2:47

their earnings call next week (Nov. 5th). We're entering the seasonally strongest period of the year for stocks and the Fed just cut rates again today and announced the end of QT for December 1st. From a trading perspective, that's likely enough to keep stocks in rally mode for now. That's why we've added some speculative growth names like REAL and LMND as trades since September.

John C.

2:50

Please comment on ARE. Outlook? continue to hold? dividend safe? Thanks

Roger Conrad

2:50

Hi John. I think there were definite signs in Alexandria REIT's Q3 results that the biotech sector is bottoming and the occupancy rates at the REIT's campuses are stabilizing. The government shutdown is definitely hurting the sector and Alexandria by extension, prolonging the capacity glut in several key markets. But leasing was robust as were rents. And the Lilly deal is a major plus.
That said, however, management did cut guidance for 2025--based on lower than expected year-end occupancy. And during the earnings call, it appeared to hint at a dividend cut, possibly before the end of the year--for the purpose of holding in more cash to self-fund development and limit new debt.
That's essentially what BXP did earlier this fall. I think in this case, the dividend warning was a surprise and it was delivered on a bad day in the stock market for REITs and dividend stocks in general.
I think the selloff of ARE the past two days is overdone. Today's action looks related to some big research funds cutting ratings

Victor

2:51

Hello guys. I have several questions and I won't be able to attend today's chat. I'll send all my questions at once. Thank you! Elliott: You wrote an article reviewing VG and the reason it went down in price. Is this one still a good candidate for fresh money?

Elliott Gue

2:51

Yes, as we've been saying its the most aggressive pick in the portfolio. However, they won their arbitration against SHEL in August and then lost to BP earlier this month. Even if they lose all remaining cases, their maximum liability is probably in the $6 to $7 billion range, which is going to sting but is already more than priced in given the $8+ billion decline in market cap since the BP announcement. More likely their ultimate liability comes in well under that and the market has overreacted to the BP news. Longer term their modular LNG liquefaction design allows them to bring facilities onstream in a fraction of the time required for traditional large-scale LNG facilities.

Roger Conrad

2:52

Continuing with Alexandria REIT, these firms are cutting after the fact. But their moves combined with the surprise on the dividend is still predictably spurring some selling.

2:54

My view on the company is I'm going to cut it to a hold--no one who doesn't own it should buy and no one who does should add to positions. The stock price reflects a pretty big cut now. And despite the current turmoil, biotech is a vital industry. But I want to see how the REIT responds to these tougher than expected headwinds. If might also be a tax selling candidate. But I'm not making that decision at this time.

Eric F

2:58

Hey Roger, what are your feeling on ARE now, thanks for all your help :)

Roger Conrad

2:58

Hi Eric. I hope you'll check out my more extensive answers on Alexandria REIT earlier in the chat. In brief, Q3 results show green shoots of a recovery but also at least temporarily worsening headwinds for their biotech tenants from the government shutdown. Also, management apparently wants to hold in more cash to self-fund its development program more cheaply--grow their way out. And that means a likely dividend cut. Such an action is priced in with the stock yielding 9% plus. But I'm cutting the REIT to a hold until we see what management is going to do with the payout.

Barry J.

3:06

Hello Roger:

You recently advised us readers of your “change of heart” regarding WES and you recommend it. And you continue to be a strong supporter of PAA, ET and MPLX. And, of course, you strongly recommend to us readers that we invest in companies that grow their dividends.

Does either WES or PAA have a stronger bent or future relative to growing its dividends over ET and MPLX?
Is either WES or PAA more likely to be acquired than the other?
What are the relative sizes of the 4 mid streams – I think ET is the largest of them all?

Thanks.

Roger Conrad

3:06

Hi Barry. By market cap, Energy Transfer is about $58 bil. MPLX is $51 bil, though that includes the majority ownership of Marathon Petroleum. Plains is much smaller at $12 bil and Western is a little less than $15 bil though that includes Occidental's stake.

Plains is the most likely target in my view because of its smaller size and because there's no larger GP to buy out. Western would only get an offer from Occidental--or if OXY sold out, which at this point seems unlikely. MPLX would only get an offer from Marathon, always a possibility but one would have been a lot easier in the previous decade. Energy Transfer is certainly a possible merger candidate--though the list of potential suitors is likely pretty thin--super majors etc.

As for dividend growth, I think all of them are likely to settle in a mid-single digit percentage range. We may have one more big one from MPLX and/or PAA/PAGP. But i think that's what we count on.

Victor

3:09

Elliott: What's your opinion on precious metals including GLD and SLV. And do you believe that this pull back is a reversal from the current uptrend?

Elliott Gue

3:09

I wrote a piece over on Substack and also in Creating Wealth regarding GLD and SLV, both of which we've recommended in the model portfolios back in late September (around September 28th if memory serves). Basically, I outlined a longer-term target of $100/oz. for silver and $6,000/oz for gold but cautioned that both precious metals were getting stretched on the charts, particularly silver which was right into its 1980 and 2011 peaks. In my view when any asset -- whether its a stock, commodity or fixed income market -- approaches an obvious resistance level that's held for 45+ years it's probably going to pull back and consolidate at a minimum. It's pretty hard to clear resistance like that on the first attempt. So across all of the services -- trading services like CT Trader, Elliott's Options as well as longer-term services -- we've recommended taking some money off the table and reducing risk. I've recommended this both for GLD and SLV as well as precious metals mining stocks like Wheaton Precious Metals

Elliott Gue

3:09

(WPM) I've recommended since the spring of 2023 in longer-term services. My working theory remains that we'll ultimately see higher gold and silver prices. I don't think this bull market is done and the longer term targets I outlined remain valid. However, it's an open question how long it'll take to break higher again. Will we find a low and consolidate for a few weeks, or could it take several months -- at this time I just don't know. My plan is to watch these markets for now. If it looks like we're in for a longer-term consolidation then we'll probably book the remaining gains in the shorter term trading services (particularly Elliott's Options since our exposure is via January calls on SLV). For the longer term services I may look to pare back exposure a bit more, but my inclination is to maintain some exposure to benefit from the next wave of the bull market in precious metals. Sorry for the long-winded answer to a short question!

Barry J.

3:10

Hi Roger:
I am sure you will receive many questions today about ARE.

Your thoughts about holding or adding more to our positions if we are (i) long-term holders and (ii) can withstand a major drop in its price?
In your opinion, what impact will the changed guidance have on its $5.28 dividend?

Thanks.

Roger Conrad

3:10

I don't have a lot to add to what I've already answered during the chat on Alexandria REIT.

I do not advise doubling down on a fallen stock, so I would not add to positions at this time. And I may wind up advising a sale for a tax loss later this year, depending on future developments.

I don't think anything in the Q3 numbers or slightly reduced guidance mandates a dividend cut. But management definitely warned of a future cut during the guidance call--for the purpose of using less debt to complete the development program. I think a cut is priced in. But my advice is a hold until we get a little better read.

brian

3:22

Roger, great work as always! I have a substantial gain in DUK and ES in my IRA, I was thinking of taken the gains now and hope to buy these great stocks later at a lower price. This makes me nervous as I live on strictly on dividends and now the market has corrected somewhat on these stocks I afraid I might not be able to buy them back.

Roger Conrad

3:22

Hi Brian. I'm glad you've done well with the recommendations. Neither of these stocks is at its designated "Consider Taking Profits" point--in fact, EverSource is still slightly under its highest recommended entry point of 75.
Both companies report in early November and from all indications will basically affirm 2025 and longer-term guidance. I also think ES is in process of seeing a huge weight lifted off of its stock price--as financial liability from the Revolution wind facility goes into the rear view mirror, the company is able to slash debt from the Aquarion sale and the Connecticut regulatory environment improves.
I don't think utility stocks are among the most vulnerable sectors to a market correction. But that said, there's always something to be said for rebalancing your holdings by paring back some of your biggest winners. We're always best off with more evenly spread investment than a handful of overweights. And there are still utilities and other dividend stocks that haven't gone up as much.

Victor

3:23

Elliott: What is your outlook on PR and OVV?

Elliott Gue

3:23

Fundamentally we like both names. PR is an oil-focused producer in the Permian with low breakeven costs and an industry-leading yield over 4.5%, which is sustainable even with oil down under $50/bbl. OVV is a mixed oil/gas producer and we like their western Canada exposure to the LNG Canada export story. In both cases, the stocks are driven by big picture "macro" trades around oil right now. This is something Roger and I discussed at the Orlando Money Show in the video we posted last week. Just last Friday, I also discussed this in a podcast interview I did for Wall Street for Main Street. At any rate, the bottom line is that everyone hates oil -- it's as out-of-favor as any time I can remember in my career except, perhaps, the late 1990s when we were approaching generational lows. Active Fund managers surveyed by Bank of America this month were as underweight energy socks as any time in the last (nearly) 25 years they've conducted their monthly survey. The IEA has been publishing reports for a while now

Elliott Gue

3:23

projecting a looming glut of oil on the world market just around the corner (we never reach that corner, but that's another story). By early next year IEA is forecasting 4.5 million bbl/day of excess supply, which is a bigger glut than early 2020 when much of the oil-consuming world faced travel restrictions/lockdowns. Yet despite the overwhelming bearishness out there, oil keeps holding support in the mid-to-upper $50s for WTI and the low $60s for Brent. US and OECD inventories are near their 5-year seasonal lows. We saw strong demand for oil over the summer in the US, with refiners running at record-high utilization rates every single week since early July. Energy stocks are broadly flat and mostly well off their spring/summer lows. When a sector and asset (oil) are so out of favor that's historically exactly the time you want to be looking for names to buy. Once oil does start to rally there will be a ton of institutional investors tripping over one another to reverse their underweights and buy the stocks

3:24

I can’t tell you exactly when the low will be in. However, I believe that 6 to 12 months from now, higher quality energy stocks like PR and OVV will be trading at far higher prices than is the case today. I also believe a year from now oil is more likely to be trading well over $70/bbl than under $50.

brian

3:27

Do you think CVX will do better now that HESS is in the barn

Roger Conrad

3:27

Absolutely. The big prize was the 30% ownership stake in the Stabroek field off the Guyanese coast--which still has tremendous upside for very low cost production. But they also have some great new shale assets in this country, particularly in natural gas. And the eastern Mediterranean assets acquired with Noble Energy earlier in the decade are just now beginning to take off.
The stock's performance has been muted this year because of soft commodity prices--which will show up in Q3 results later this week. But the stock is still well in the black (11%) year to date in a tough year for energy--also a sign of underlying strength. I still see the stock as a buy up to 160.

Victor

3:29

Elliott: As rates may go down, do you see TLT as a good place to put some money to work?

Elliott Gue

3:29

I recommend some small exposure to TLT in Smart Bonds; however, I generally prefer the belly of the curve. In prior cycles, intermediate term investment grade corporate and bonds and govvies offer similar returns to long-term Treasuries (TLT) with less volatility until months after the start of a recession. We also like TLTW in smart Bonds as an alternative, which owns TLT and sells covered calls to generate additional premium income. TLTW is up 14.41% year-to-date in 2025 including monthly distributions paid compared to 8.85% for TLT and 7.62% for the Bloomberg Aggregate US Bond Index.

Frank

3:31

Hi
Confused about the recent nuclear announcement. The news media keeps highlighting Cameco CCJ and Brookfield Asset Mgmt BAM. I thought it was BEP 51% / CCJ 49%, but CCJ went up over 23% on the announcement, and BEP only moved 5% higher, even BEPC was only up 6%. Why no mention of BEP in the news releases or analysis?
Frank F

Roger Conrad

3:31

Hi Frank. I answered your question a little earlier in the chat. Bottom line--I'm far more comfortable holding onto BEP/BEPC as a bet on nuclear power in the US than pretty much any other company that has exposure to nuclear development.
One, I think to the extent there are new orders for plants here, this government deal ensures Westinghouse will get a big chunk of them--and BEP/BEPC will get the earnings benefit. And two, as you've pointed out, their shares are getting full credit--though BEP is up 41% year to date and BEPC is up 60% plus--so they are getting some.

Elliott Gue

3:36

Here's a question from the e-mail Queue: Just saw the Florida piece and see that silver is down to $ 41 and your comments on oil ( bearish). Is it time to sell Silver and buy UCO. Answer: We've recommended both in our CT Trader service. We did recommend taking some money off the table in silver a while back as we approached those January '80 highs; however, we're holding the remainder because we think silver may ultimately go a lot higher. Oil is basing and looks ready for a major move, but it may chop around a bit more before moving higher. AT this time we have a small position in UCO and a position in an energy producer in the model portfolio and will likely look to add once we start to see oil/energy stocks break higher on the charts, confirming our constructive view.

Ron

3:36

I’m thinking ET is the most undervalued mlp in the market. Your thoughts?

Roger Conrad

3:36

Hi Ron. I couldn't agree more. Broadly speaking, I think too many investors are treating midstream--especially MLPs--as though 2025 is shaping up for a repeat of 2015, which was a disaster for midstream. But the industry including Energy Transfer is in a far different place now--only a handful of significant players as opposed to 100+ in 2015, far lower levels of debt as companies continue to self-fund growth, more conservative contracts etd.

ET reports Q3 results and updates guidance on November 5. And it should declare another dividend increase at the same time (3-5% annual growth). I expect to hear more about the earnings benefit of the Sunoco affiliate's acquisition of Parkland Fuel, which will close Oct 31. But I'm comfortable recommending ET ahead of the announcement for anyone who doesn't already own it.

Frank

3:43

Recently I read two recommendations on CNQ, having a low cost per barrel, steadily rising dividend, and good growth prospects.I know you have CNQ in your Canadian list as a buy, but I don't think I've ever heard you talk about it.

Roger Conrad

3:43

Canadian Natural Resources is a financially solid, low cost producer--needing only a "low to mid $40s" oil price for cash flow to cover maintenance CAPEX and dividends. And their policy is to share cash flow generously with shareholders as cash dividends and stock buybacks. They have properties across Canada that are in prime position to profit from increasing exports to Asia, both oil and LNG.
A couple caveats--the stock is priced in and dividends are paid in CAD converted to USD for the NYSE-listed shares, so currency does affect returns. Also, there is 15% Canadian withholding tax, which can be recovered as a credit when you file your US taxes.
We don't see either as a real hurdle to owning CNQ. it's a potential portfolio pick as well.

Dudley

3:51

Hi guys. I know you prefer individual stocks but have a closed end fund question. UTF is an infrastructure CEF with a strong utility focus with all of companies w/I your buy range and currently sporting a multi year high almost 8% monthly dividend. This is due to a recent rights offering. Would appreciate your thoughts.

Roger Conrad

3:51

Hi Dudley. Having sat on a board of a closed end fund for 10 years, I can say that CEF yields are a bit more complex than owning individual stocks. Mainly, they're typically covered from a variety of sources including debt leverage. And all shareholders ever see is a snapshot of data in a quarterly report--which is already out of date when published. I think these funds have merit. But at the end of the day, you're counting on management to maintain that dividend.
Cohen Steers hasn't changed the monthly rate since January 2018. It's also returned less than 5% in a year when the XLU Utility ETF is up 20% plus--so "infrastructure" means they own a lot of stocks besides utilities, which as of the latest data are around 50%.
I think it's a decent fund with a consistent record. But I'd still rather pick my own stocks.

Jon B

4:01

Hi. Can you lay out your rationale for why you think Chevron is likely to buy in HESM? Seems like CVX bought HES for one reason: the Guyana asset. What will prevent CVX from unloading the 2nd-tier assets that HESM serves? Also, regardless of buy in or not, how robust are HESM operations to further declines in oil prices? Thanks!

Roger Conrad

4:01

Hi Jon. Chevron is in cost cutting mode. Asset sales are part of that. And it's possible we'll hear some announcement regarding the Bakken assets served by Hess Midstream when the company releases Q3 results on Halloween (Oct 31).

That said, however, Chevron did announce drilling plans this fall that appear to be directed at holding these assets long term. They cut the drilling rigs from 4 to 3 starting in Q4 2025--that's expected to hold oil output flat to bring down cost. But they're also still contemplating rising natural gas output.

Leaving aside the question of whether it's fair to call the Bakken assets "second tier," Chevron is obligated by the same MVCs (minimum volume contracts) in the Bakken with Hess Midstream as Hess Corp was. So would be anyone they sold the assets to.

So one rationale for just buying in the rest--probably with stock--would be Chevron could cut the price of these contracts drastically at a relatively low cost. This is also what CVX did just a few years ago in the DJ Basin.

Roger Conrad

4:03

Continuing with Chevron and Hess Midstream--CVX bought in the rest of Noble Midstream it didn't own about six months after closing on Noble Energy. The primarily assets it acquired in that deal were in the eastern Mediterranean Sea. But it was able to cut costs by buying in NBLX, taking control of the midstream assets and eliminating the contracts.

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