JotCast | 7/29/25 Capitalist Times Live Chat

Return to

7/29/25 Capitalist Times Live Chat

Prev Page View Full Chat

Roger Conrad

5:22

It's not a company we have in any of our coverage universes now. Q1 results actually look pretty solid. But this is a micro cap company (market value $570 mil) operating in a sector dominated by giants. And in the chemicals sector my favorite stock is LYB--which I answered several questions on earlier in the chat.

Dan E

5:28

Hi Roger, With Vistra (VST) now reaching the $200 per share level again, I noticed there is now an ETF (VSTL) that tracks the price movement of VST exclusively at 2X. Should we consider this launch of an ETF a sign of a market top/crazyness, or is there still room to run in VST's wild ride in the stock market? Thanks to you I purchased VST in 2021. Thanks for your thoughts.

Roger Conrad

5:28

Hi Dan. Vistra has obviously been just a massive winner for us the last few years--definitely vindicating all that time we stuck with it when no one seemed to want to buy and management was considering going private.

I expect solid Q2 results and guidance from the company on August 7. But you're absolutely right that when you start to see Wall Street products like a 2X ETF for a stock, it's definitely time to lock in at least some gains. I like management here. I really like the natural gas power plant acquisition. I like all the solar and storage they're building. I like the savings they're going to realize from shutting down old coal--even if the federal government is forcing them to delay. But I've seen too many stocks of companies I like fly too close to the sun. And I think it is time to book at least some of our very, very large profit in this one.

Lawman

5:33

Is it worth it to invest in Pembina Pipelines over US based MLP's given the 25% penalty on PBA's distributions?

Roger Conrad

5:33

I'm not sure what you're talking about here. Pembina is a Canadian company, which means there's 15% withholding tax on dividends paid to US investors. This is recoverable as a credit when you file your US taxes. And even if for some reason you made no attempt at recovery, you'd still be getting 4.6%--with potential to participate from a stronger Canadian dollar (up 5% year to date).

The main reason to own PBA, though, is it's the midstream company most at the center of and focused on Canada's emerging energy export sector. I expect more details about the company's plans when it releases numbers on August 7.

Lawman

5:39

Is TTE a better or worse investment that US based majors such as XOM and CVX give the 25% penalty on distributions? Same question for Vermillion (albeit it is not a major)?

Roger Conrad

5:39

Once again, what you're talking about is withholding tax, which is recoverable as a credit on your US taxes. TotalEnergies (Paris: TTE, NYSE: TTE) would also still yield close to 5% if for some reason you made no attempt to recover the withholding tax.

I like TotalEnergies--which by the way just increased its dividend by 7.6%--because it's the only super major in the world that's been able to profitably enter the global electricity generation business. In contrast, BP, Shell, Eni and others never achieved that and are exiting. TTE is still an oil and gas company to its core. But electricity is now a meaningful contributor to earnings and cash flow is not cyclical--which further protects the dividend against lower oil and gas prices.

Vermilion is smaller and more speculative. But I look for earnings Aug 7 to show the profitability recovery to be on track. It's tracked in the Canada and Australia EIA coverage universe.

Lawman

5:42

Do you have a favorite between VZ and T?

Roger Conrad

5:42

Both are Conrad's Utility Investor portfolio holdings. Both had a strong Q2 and convergence strategies are on track--combining fiber and wireless. Along with T-Mobile US, they form a Big 3 US telecom sector that's increasingly taking market share and revenue from the rest of the industry.

The way I would look at this is not an either or between AT&T and Verizon. Rather, it's to base a US telecom investment strategy on AT&T, Verizon and T-Mobile when they trade at good entry points--and pretty much avoid almost everything else.

Lawman

5:47

Why has BMY performed so badly, and worse than many other big pharmas? What are your thoughts on this company?

Roger Conrad

5:47

I'd rather answer that by talking about what my favorite big pharma--Abbvie--has that Bristol Myers Squibb does not. That's a diversified and rapidly growing pipeline of treatments, demonstrated ability to replace revenue from treatments with expiring patents (most recently Humira), a strong pipeline of future treatments to take the place of current stars, a strong acquisition strategy to buy and the balance sheet to fund purchases when in house development is not the best option, a US focused supply chain that limits exposure to erratic US government trade policy and clear prospects for sustainable dividend growth.

Bottom line: Abbvie is just a better company.

Victor

5:53

Hello Roger, now that we officially have CVX in the actively managed portfolio, I hear that Stabroek is a game-changer in terms of billions of barrels and a cost profile that rivals the Middle East. I see that analysts are rating this one as a buy with a 12 month target as high as $186. How do you feel about it? Also, are we still planning on keeping XOM in the portfolio? Thanks.

Roger Conrad

5:53

Hi Victor. We actually currently rate Chevron a buy at 150 or lower--a price it held below for several months this year. We may raise that target in future. But as I indicated answering a question earlier in the chat, getting Hess Corp is huge for this company--really re-setting its production profile and allowing it to for example adopt a free cash flow strategy in the Permian Basin later this decade.

That said, we're not letting go of ExxonMobil either. As we recently noted in an Alert following the close of the CVX/HES merger, we believe the narrative that ExxonMobil lost something in the arbitration case is just flat wrong. Sure, it wasn't able to add to its Stabroek stake. But it's still the operator and 40% owner of the world's most prolific new oil find. And it now has Chevron--probably the world's number 2 super major--as its partner, a big step up from Hess. Any weakness is an opportunity to buy.

Denisimo

5:57

I don't think I've heard much about MPLX lately. I see the last cycle high was in the 80s. Now at 52. Your thoughts........ And where's it going?

Roger Conrad

5:57

Hi Denisimo. We could definitely see MPLX at least in the 80s before this cycle is over. For one thing, its dividend is more than twice where it was then at the peak of the previous cycle. And its business continues to become more valuable as contracted assets expand. I expect a strong result August 5, when management announces Q2 earnings and updates guidance. Shares are trading a little over our highest recommended entry point of 50--but would be a buy on a dip below that level.

Roger Conrad

6:03

Well that looks like all we have today in the queue and from emails received prior to the chat. We want to thank everyone for joining us today. You've as always given us a lot to think about.

Elliott Gue

6:04

Good evening everyone.

Roger Conrad

6:04

If for some reason your question wasn't fully answered, please drop us a line at service@capitalisttimes.com and we'll get back to you as soon as we can.

6:05

And if you're interested in any of our services--we talked about several of them today--please email us or call Sherry 9-5 ET M-F at 877-302-0749.

6:06

We will have a link to a transcript of the complete Q&A out to you tomorrow morning. And as always, it will be posted on the EIA and CUI websites.

Have a great evening everyone.

Connecting…

Your current subscriptions

None

E-mail Address	Chat Owner	Status	Remove

Enter your email address to be notified when Sherry Roberts hosts a chat