JotCast | 8/26/25 Capitalist Times Live Chat

Return to

8/26/25 Capitalist Times Live Chat

powered by

Prev Page View Full Chat

Don

6:37

Thank you for doing these monthly chats. While it is not a REIT do you cover Vail Resorts MTN. Is the dream buy for ARE still 140 as it sits around 80. I'm looking for fresh money buys with growing yields in the 4-6% range from either utilities or reits.

Roger Conrad

6:37

Hi Don. We don't currently cover Vail Resorts. I'm not sure why they've chosen to organize as a C-Corp rather than a REIT. But I've had to cut the coverage universe off somewhere. If they did become a REIT, I would pick them up. And in fact, they have a lot of REIT-like characteristics. Just because we don't cover it right now doesn't mean it won't keep raising dividends--though I suspect it is somewhat cyclical.

Alexandria REIT is deeply undervalued in my view, as you've probably surmised in what I've written about it. I think the Q2 results and guidance were pretty solid. And I think the worries about overbuilding and a biotech bust are over wrought. I'm encouraged by the move back over 80 and I think we're going a lot higher--though it's going to require some patience.

I'll do my best to keep bringing those high yielding, growing stocks!

Victor

6:41

Hello Roger, I'm not sure if you commented on this one, but XIFR has been slowly going up from the lows of Feb-25. Is this slow uptrend sustainable?

Roger Conrad

6:41

Hi Victor. Yes, it should be sustainable. The company has to continue to cut debt, especially the CEPFs that are tied to specific assets. But if anything, the plan laid out earlier this year is going better than expected. I think it's possible NextEra will take the whole thing private at some point. And a dividend even in a best case is likely still a few years off. I will be monitoring results to make sure the recovery is on track. But Q2 results were encouraging and I expect Q3's to be, mainly because this plan appears to be entirely within the XPLR's control.

Denisimo

6:45

Excuse me if this has already been covered. Could you please help us understand how the Oil Royalties, BSM & DMLP, work. Their dividends are variable - depending on oil prices - but will they exist for 10 years + ? Do they ever 'run out of oil' to sell? Are they continuously 'buying into' the selling of oil? And are they a dividend trap? Thanks.

Roger Conrad

6:45

Hi Denisimo. Some of the royalty trusts have run out of assets--BP Prudhoe Bay went away a while back and San Juan Basin Trust (SJT) may be headed that way after eliminating its dividend last year.

But there's no hard and fast rule that says a royalty trust can't continue indefinitely, with periodic purchases of land and so on. A period of higher energy prices can also prolong life, as with the case with BT Prudhoe Bay a couple decades ago extending life expectancy more than 10 years and paying huge dividends along the way.

Both Black Stone and Dorchester appear to have quite a bit of inventory. They will pay lower dividends when commodity prices are down. And I would not speculate on how long they'll be around--they could be taken over. But the thing to watch is commodity prices. We think they're going higher, which means BSM and DMLP dividends and share prices will as well.

Guest

6:49

Hi Roger: I believe some time ago (maybe more than 1 year ago) you opined that PAA would be a great acquisition for a larger player in the industry. 1. Is that still the case? More importantly for my family and me, we live off our MLP dividends from ET, EPD, MPLX, BEP and PAA. 2. Do you believe that PAA will generate another substantial increase in their dividend? 3. How about MPLX - they had a huge almost 10% dividend increase 1 or 2 years ago, right? Is something like that possible again for MPLX? Thanks. Barry

Roger Conrad

6:49

Hi Barry. Yes, I think the endgame for Plains is almost certainly a takeover--probably by another MLP like Energy Transfer, which would eliminate any tax consequences. This is an industry that continues to consolidate rapidly--scale works. It's how companies can drive down costs in what's a maturing market for North American midstreams. PAA has great assets and is increasingly concentrated in Texas--so it's becoming progressively more attractive.

I think a dividend increase in upper single digit percentages is easily affordable for both Plains and MPLX later this year. That's supported by cash flow and strong dividend coverage.

Jeff B

6:54

What is your opinion of SL Green? Do you think if this wild mayoral candidate gets elected it will affect their properties?

Roger Conrad

6:54

Hi Jeff. I have recommended SL Green--the consummate New York City office property owner--in the past. But I think if you want to bet urban office, BXP is the better play--similar yield, better coverage, more diversified and increasingly focused on premier properties including its 345 Madison Ave project.

I'm not entirely sold on the idea that office is going back to where it was pre pandemic. Most businesses aren't going to pay premium rents just to force employees to come to an office five days a week--when they can save money and keep employees longer. But there are opportunities here and BXP looks best placed to capitalize.

Dan N

7:00

Hi Roger- I know it’s kind of a rare moment when you make new recommendations to the CUI aggressive and conservative portfolios, but I imagine you must keep a list (maybe in pencil) of favorites you’re considering to add next. Could we ask what stocks might be on the proverbial bubble? Thanks-

Roger Conrad

7:00

Hi Dan. That's a great question. Northwestern Natural (NYSE: NWN) looks increasingly interesting to me with the yield close to 5% and after making all of those acquisitions. So does ShenTel (NSDQ: SHEN), which continues to build fiber broadband and looks more and more like a takeover target,

My problem is we already have 41 companies represented in the portfolios, which is close to one in four from the broader coverage universe currently. I really can't justify adding a stock unless we get rid of one. That said, I do have a number of companies that have huge gains now and are selling well above where I'd buy them. So we could be seeing some turnover soon.

In the meantime, you can get a good idea of what I'm considering adding by checking out the Utility Report Card when I update it every month with the issue. And I also will mention non-portfolio stocks in Feature articles.

Guest

7:06

Hi Roger: At one time I think (not sure though!) you recently suggested that AES looked similar to VST in its appreciation potential. Can you expand on that thought? And what makes AES such a good potential investment? Thanks for all of your hard work answering all of our questions!!! Barry

Roger Conrad

7:06

I think AES does resemble Vistra of a couple years ago in a few respects. First, it's in a business--electricity--where demand is rising rapidly. And it's staking out solid market share, both with contracted power sales to Big Tech data centers and through regulated utilities. Second, it has a long track record of meeting guidance--that's now 7-9% annual earnings growth based on a verifiable investment pipeline. Third, the balance sheet is strengthening, AES is now fully investment grade, Vistra slightly less. And fourth, management is publicly ruminating about taking the company public because of not getting a fair valuation.

Ironically, Vistra replaced AES in the DJUA last year--index sponsors frequently take out underperformers to boost returns. It's also benefitted from the sudden popularity of nuclear energy, while AES has no nuclear exposure. And AES has been dragged down by concern about tax credits for renewable energy being phased out.

What would make AES the next Vistra?

Roger Conrad

7:07

I think it could start with something as simple as demonstrating AES can keep growing under the new rules. Also, this isn't the 1980s--wind and solar are only going to become more competitive. And eventually, we'll have a change in Washington that makes these stocks popular again.

7:09

When you buy a beaten down quality stock like AES, you're not going to really know what the catalyst for recovery is. But so long as the business stays on track--and AES' is--you can afford to keep betting without guessing. And this is a stock I intend to keep collecting dividends on for a long time to come as I wait for a higher price.

Denisimo

7:15

Is it time to sell HESM ?

Roger Conrad

7:15

My view is Hess Midstream is likely to be taken fully private by its now lead owner Chevron. Doing so would allow CVX to cut its costs in the Bakken by eliminating the capacity based contracts Hess Corp signed with Midstream--so it could do a successful IPO. And CVX has done this before when it bought out Noble Midstream in the DJ Basin after finishing the Noble acquisition.

I would not expect CVX to broadcast its plans or even hint at doing this until it can announce an actual transaction. And it may wait to get more familiar with the assets--as it did by making an offer for the former NBLX about six months after closing NBL. But it's what makes sense to me.

HESM is now well above our highest recommended entry point. But the yield of 7% plus is still growing and attractive--supported by those contracts. I wouldn't rule out a sell. But we're sticking with it for now.

Roger Conrad

7:16

OK. Well that's all we have in the queue today. We'd like to thank everyone for participating today. You've given us a lot to think about. And we look forward to talking to you next month..

7:17

We will be sending you a link to a transcript of the complete Q&A tomorrow morning. And of course it will be posted on the CUI and EIA websites.

If for any reason your question wasn't addressed or fully answered, please drop us a line a service@capitalisttimes.com. We will get to it as soon as we can.

7:18

Have a great evening everyone. And have a very happy Labor Day weekend! Thanks again for your business.

Susan P.

7:19

I am curious if/how you both factor the % of outstanding shares sold short? Thanks for your answers.

Roger Conrad

7:19

Hi Susan. When a stock I cover has a large amount of short selling volume--really 5% or more of float is elevated for most of the coverage universes I follow--then I first want to know why. Mainly, what headwind is this company facing that has so many people betting against it? I can then make a judgement of whether I want to bet with them, against them or do nothing.

Short sellers have a reputation of being more savvy than investors who are long. But that's not always the case. In fact, shorts can be just as vulnerable to a herd mentality as anyone else. And when I see analysts covering a stock and insiders bullish, it can be a real opportunity for upside by squeezing the shorts. I think that happened to Vistra shorts the last few years--which was great for CUI readers. I think there are opportunities now in some of the renewable energy stocks.

Elliott Gue

7:19

I look at short interest mainly from a trading perspective. Specifically, I watch short interest as a percentage of the float as well as the short interest ratio (days to cover; SI/average volume). When these numbers are in the high side -- I generally sit up and take notice when days to cover is over 5 to 7 -- then if the stock starts to move higher you'll often see that move accelerate to the upside as those shorts buy to cover their positions. A classic example in our coverage universe is Comstock Resources (CRK), a smaller gas producer in the Haynesville that's majority controlled by Jerry Jones (the billionaire owner of the Dallas Cowboys) . Since Jones holds most of the float and there are a lot of shorts outstanding, this name is subject to short-term spikes driven by short-covering. Sometimes Jones seems to relish squeezing these shorts as he did last summer by purchasing stock when CRK fell under 10.

Roger Conrad

7:19

Ha! That was one last answer for you. Thanks again everyone. Talk to you next time!

RBB

7:21

Thanks for your time and guidance. Take care and have a safe, pleasurable Labor Day.

Roger Conrad

7:21

Thank you!

Roger Conrad

7:21

Bye everyone.

Connecting…

Your current subscriptions

None

Register now to continue managing your subscriptions

E-mail Address	Chat Owner	Status	Remove

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