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2/25/21 Energy & Income Advisor Live Chat
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AvatarElliott Gue
4:56
Roger discussed TOT in some detail earlier in the chat but, to summarize, we still like the name. We also continue to like XOM, which is the supermajor that has arguably the best growth prospects over the next few years.
ron
5:34
Yield certainly effected the market today. The Fed. thinks there is no problem with inflation.  If we do get rising inflation, what will that do to our energy stocks?
AvatarRoger Conrad
5:34
Ron it really depends on to what extent rising market interest rates put the brakes on the economy--at a time when there's really not much inflation, particularly not of the wage variety. Inflation with growth all else equal will mean higher commodity prices, which should be a very big positive for energy stocks as it has been in the past. But the key here is if there is a back up in borrowing costs that winds up having a significant impact on growth. We think we're a long way from that point right now. And in any case, the fiscal stimulus plus the end of the pandemic should help energy demand as this year continues. The fact that companies are not borrowing but trying to pay off debt by generating free cash flow should also help them on the business side if rates do become a real problem.
Terry
7:26
OXY seemed to disappoint this quarter. Any change in your view of this stock?
AvatarRoger Conrad
7:26
Hi Terry. We really didn't see anything truly surprising in either the Q4 numbers or the 2021 guidance, CAPEX plans etc. And in fact there were no changes in advice from the 26 Wall Street firms covering Occidental as tracked by Bloomberg Intelligence--other than Tudor Pickering raising its ultra bearish 12 month price target from $12 to $22. There was some impact on output in the Permian from the Texas storm. But the bottom line is the company has made some painful adjustments over the past year to cut costs and absorb the assets of the former Anadarko and it's on track to generate free cash flow even at much lower oil price than we see now. Bottom line is we still like OXY as a buy on dips to 25 or lower.
Joe
7:30
Gentlemen,  what are your thoughts on MRO stock growth this year?  It’s been a very profitable investment for me so far this year.  All the best!
AvatarRoger Conrad
7:30
As you know, we've been mainly focused on the larger producer names at this stage of the energy price cycle. We have looked at this one in the past and it does appear to have made adjustments needed to generate free cash flow this year at a $50 oil price. It's also a potential target for sector consolidation. We expect to get more aggressive on Marathon and other smaller producers in coming months. For now, however, we favor the names in the Portfolio.
AvatarRoger Conrad
7:32
That looks like all we have in the queue and from emails received prior to the chat. Once again, thanks everyone for joining us today and especially for being Energy and Income Advisor members. Look for a link to the complete Q&A transcript in the near future. If for some reason your question wasn't answered fully today, please drop us a line at: service@capitalisttimes.com.  We look forward to chatting with you next time.
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