JotCast | 11/17/20 Conrad's Utility Investor Live Chat

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11/17/20 Conrad's Utility Investor Live Chat

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Roger Conrad

8:29

That's a level where I'd probably recommend selling half--would be a nice "problem" to have but I think it should get there given the company's great strengths and renewable energy leadership.

Guest

8:31

Do you think AT will ever get out of its slump

Roger Conrad

8:31

They will if they can continue to reduce their debt leverage and maximize the value of their power generation assets. it's been a very tough environment to the latter, as weak wholesale power prices and availability of cheaper renewable energy has undercut the ability of companies like Atlantic Power to renew contracts. But I remain very impressed with this company's ability to navigate through tight passages. And I think eventually the CEO will succeed in selling the company in a high premium takeover--just as he did at his previous company.

Jimmy

8:38

I liked and appreciate your response to the question about your retirement. I would like to ask you a similar question to get your thoughts. When it does come time to retire FROM THE MARKETS and no longer wonder and worry about the ups and downs of the markets, where does one go with his cash? CD's are out for now, annuities are of no interest, bonds pay so little.

Roger Conrad

8:38

You're really asking the wrong person. I can't ever imagine not wanting to have control over managing my assets, any more than I would my own health. I know not everyone feels that way and I think it's important to have someone you trust be able to take over if needed. But for anyone who wants to retire from the market, the best idea is going to be to hire someone to manage your investments for you. Whatever you save by putting money into CDs, annuities etc will be lost to mediocre returns. Bonds don't offer any degree of safety either unless they're very short term, in which case they won't yield very much. No the only way to make your assets last and to generate a living wave from investing is with stocks.

Thanks for your question.

Charles

8:42

Is the diff between BEP and BEPC simply K-1? Is there a reason to recommend one over the other. I understand BEP is way above your buy price.

Roger Conrad

8:42

That's pretty much it. But the difference in pricing really does illustrate just how the investible market for MLPs has shrunk the last few years--to the point where a lot of capital simply can't buy them. You've got to hand it to Brookfield offering C-Corp shares in a very solidly performing company focused on renewable energy--and just when investors really started buying anything to do with wind and solar like there was no tomorrow. I think one reason the difference between BEP and BEPC has grown so wide is that the big money that would normally arbitrage this back to something making economic sense aren't allowed to buy the BEP units. But it makes no sense at all for individual investors without those constraints to buy BEPC over BEP now, unless that price gap tightens by a lot.

Guest

8:43

What are your thoughts on National Fuel Gas?

Roger Conrad

8:43

I gave a fairly extensive answer on National Fuel Gas a bit earlier in the chat and don't have much to add--other than I like it all the way up to 55 and I did highlight its Q4 and FY2020 (end Sept 30) earnings in detail in the comments of the current Utility Report Card.

Ron K.

8:48

An analyst came out recently with a buy on T-Mobile, a hold on Verizon, and a sell on AT&T. I'm assuming you don't necessarily agree with him. What's he missing?

Roger Conrad

8:48

That's actually pretty much the consensus view among many analysts now. I can't speak for the analyst or why that's his view. But I will say it's a lot more difficult for a stock trading at 47 plus times next 12 months earnings to meet investor expectations than one trading at just 9.4 times like AT&T. I will also say that I think Deutsche Telekom is a much better way to own T-Mobile than TMUS itself--for the yield if nothing else. I do concur on the Verizon hold recommendation--it's a buy on a dip under 60 though. You can read more on my views of each company in my Utility Report Card comments.

Ron K.

8:53

Any new developments on the Centerpoint Energy and Enable Midstream relationship?

Roger Conrad

8:53

I'm expecting to hear something more at Centerpoint's Investor Day next month. But at this point, management is playing things pretty close to the vest. I thought Enable's Q3 results indicate stabilization of its fortunes which should make it easier to sell. So does OG&E's apparent concurrence that it's time to sell. And as I noted in my EEI report, I did hear some encouraging words from credit raters regarding CNP's plans to sell some gas distribution LDCs as well. But at this point, all we can do is wait on future developments. I do note than CNP is now trading over $25 a share--that's well over my highest recommended entry point. And the preferred in our Aggressive Holdings is now at nearly $45. If we see much higher prices before there's hard news, we may recommend taking some money off the table. But at this point, the best course is to just be patient. Things are definitely moving in the right direction and are likely to continue to do so.

8:54

Roger Since you have been on over five hours, this is just a short THANK YOU for recommending Center Point Preferred several months ago!

Roger Conrad

8:54

You're very welcome! And thank you for staying with me!

Jason

9:00

I have received some emails about your Reit Sheet offering. Can you discuss this generally and what you have seen and expect for the performance.

Roger Conrad

9:00

Thank you for that question. It's more or less the same format as CUI--meaning I have a coverage universe, I look at it company by company and then I combine what I find out with other data to draw some general conclusion, and make recommendations.

When I launched it last year as a feature in Deep Dive Investing--we now sell it separately as well--it was very tough to find any bargains in the bid up REIT sector. This year the challenge became a massive performance gap between non-traditional REITs that surged starting in March (data centers, wireless towers, renewable energy, medical research labs) and traditional REITs like retail and apartments that crashed in the pandemic recession.

We were able to get into some of the non-trads earlier this year and in the most recent issue came out big for the shopping malls, office REITs etc. Some of those have done really well but i think there's definitely more ahead.

If you are interested in finding out more, call Sherry from Monday through Friday, 9-5 ET

Roger Conrad

9:00

1-877-302-0749

9:04

You have several times mentioned your preference for off shore wind opportunities. Would you please list your picks here? Thanks once again.

Roger Conrad

9:04

Sure. On the US Atlantic Coast, the players with significant development underway (and stalled for now at BOEM) are Avangrid, Dominion Energy, Eversource, Orsted and Public Service Enterprise Group. I think they'll be joined by Duke Energy and others as production scales up in coming years. Again, it really does depend on a change in regulation coming under a prospective Biden Administration. But I think it's a very good bet. And in any case, these stocks' prices don't yet reflect the opportunity this presents for earnings growth.

Like I said, I talk about this in a lot more detail in the November Feature article of CUI--which is available on our website. And I talk about it further in my EEI post conference report.

Jeff

9:07

Roger, of the big oils which ones would be your number 1 and 2 picks? Thanks

Roger Conrad

9:07

My top two are Chevron for the US and Total SA for Europe. Both are tracked in the Utility Report Card coverage universe and rate buys. I like Chevron for its free cash flows and recently expanded oil and gas portfolio, including its new dominant position in natural gas off the Israeli coast. I like Total because it's the leading player in big oil that's achieving a dominant position in renewable energy--proving the big oil model of energy diversification is alive and well.

John

9:07

Roger, I have been with you for many years - followed you over from KCI. I am 83 and your advice has enabled me to stay in the market and manage my portfolio with good results. Many thanks and keep up the good work - you make a difference!

Roger Conrad

9:07

Thanks John. I really appreciate those kind words. Makes my day!

Roger Conrad

9:09

Well that looks like all we have in the queue as well as from emails we received prior to this chat. I want to thank everyone once again who participated today, and especially for being a member of Conrad's Utility Investor. Your support makes it possible for me to do what I do.

9:10

Thanks Roger!!!

Roger Conrad

9:10

Thank you!

Roger Conrad

9:10

I want to close by wishing everyone a happy holiday season,. Even if it's more dislocated than we're used to, it's still a time to be thankful for our many blessings. Here's to everyone's health and wealth, and many happy returns.

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