JotCast | 9/25/25 Capitalist Times Live Chat

Return to

9/25/25 Capitalist Times Live Chat

Prev Page View Full Chat Next Page

Elliott Gue

3:53

Our fundamental take on PR hasn't changed since we did the swap. PR is a low cost producer in the heart of the Permian with a peer-leading 4%+ dividend yields that's sustainable even with oil at lower levels. As we explained in yesterday's issue, we believe oil prices are too low over the intermediate term, and are unlikely to fall below the low to mid$60s for any length of time. However, near-term there are some headwinds from OPEC volumes and the oily producers like PR need some sort of catalyst to really generate some serious upside momentum for us. So, having that nice 4%+ yield while you wait for those catalysts to play out is a nice tailwind. OXY is OK, and it's well run, but we see more upside in PR and higher income while you wait.

Guest

4:03

Hello Roger and Elliott: I have purchased shares in VET but cannot locate your recommendations, if any, regarding such purchase. Could you kindly tell us readers (i) your thoughts and recommendations regarding VET short term and long term as well as (ii) any "buy-up to" limits and dream price? Thanks. Barry.

Roger Conrad

4:03

Hi Barry. We track Vermilion Energy in our "Canada and Australia" coverage universe table, which you can find on the website under the "Portfolios" tab. We currently rate it a buy at USD10 or lower. That's also the Dream price. The company had a solid result in Q2, with free cash flow after dividends and asset sale proceeds allowing significant debt reduction as well as share buybacks. Strategically, they're doing the right things to get positioned for Canadian energy export growth. And the European operations are soundly profitable.

Guest

4:07

Roger and Elliott, Oveer the years I have come to love the formaat of this discussion format. It allows me to ponder on your various poinsts without losing them while the next discussion takes place. Also the printed copy that you send allows for review.

Roger Conrad

4:07

Glad you like the format. And you can thank Sherry for how good those transcripts look!

We get a lot out of these things as well, especially since we don't travel as much as we used to.

As a reminder, however, we're both going to be in Orlando at the MoneyShow October 16-18. So we do hope to see at least some of you there!

Guest

4:18

My question rlates to portfolio balancing. My currrent portfolio is highly weighted to petroleum aand pipelines, whereas the marke tis only weighted to a minor 2-3%. Whaat weighting would you recommend at this time.

Roger Conrad

4:18

Our view is oil and gas is--even after a now five-year rally--this sector is extremely under-owned. That starts with being less than 2.7% of the S&P 500 and associated ETFs--at a time when more money is passively invested than actively managed. Oil and gas has averaged over 5% of the index, and considerably more at the peak of energy upcycles.

The S&P 500 is currently about as far from being a diversified and balanced portfolio as it's ever been, with 37% in just 8 very expensive Big Tech stocks. And a major reason we see much higher prices for energy stock prices is simply that the market always eventually returns to the mean--and coming back into balance means a lot more money coming into energy stocks.

As for an absolute number for a weighting, I don't think there's a one size fits all answer. In the past, I've said 20% is probably the upper limit for any one sector. But over weight best in class energy is definitely the play as far as we're concerned right now.

Roger Conrad

4:19

And you'll get best results from the energy upcycle by being willing to change horses every once in a while--moving to stocks that have lagged the upcycle and taking an occasional profit on a high flyer that's gotten ahead of itself.

Michael L

4:28

Roger, LYB has been in a downtrend that seems to have accelerated this month. Are you still comfortable with the stability of the dividend? Are you able to put odds on a dividend cut? I know it's just a guess, but would like your thoughts.

Roger Conrad

4:28

Hi Michael. LyondellBasell is not having a good day today. And after breaking back into the mid-50s this month, the share price is now back near the lows hit in early August. I don't think the situation has changed any the last few months. Margins for the company's primary chemicals are getting squeezed by softer demand. And despite the big free cash flow cushion LYB has been able to deliver, people are questioning whether management will cut the dividend to hold in more cash until underlying conditions improve.

As I've pointed out in CUI Plus/CT Income where we have a position, management has reported solid progress re-orienting its revenue to higher margin products, with recycled plastics and other items a major focus. That should reduce cyclicality over time, as management cuts costs as part of its cash flow plan. The company was also adamant in the Q2 call that it would defend the dividend.

I don't think a cut is a done deal. But LYB is definitely pricing in a big one already at this point.

Roger Conrad

4:30

LYB is also a long-term survivor with a history of bouncing back when conditions have improved. That's why I'm staying with it at this time. Keep in mind, the portfolio's two best performers this year are CVS Inc and Newmont--both underperformers in 2024 as LYB has been so far in 2025.

Frank

4:39

I think Roger had previously said that before this cycle is through Newmont will reach it's prior peak of $100. Well it's already in the mid-$80's. Any re-thinking of where this is going and when to take profits?

Roger Conrad

4:39

Hi Frank. Newmont is well above the level I've been recommended as my "highest recommended entry point." So the position has been a de facto hold for several months now.

I put Newmont in the portfolio because (1) I thought it was deeply undervalued relative to the benefits the Newcrest merger would bring lowering costs and lifting output, (2) it pays a variable rate dividend that was likely to be increased as gold prices rose and margins expanded and (3) it's a gold stock that will benefit from rising expectations for inflation.

As it turns out, we have all three now. And with the Fed cutting interest rates with inflation rising, gold prices and inflation expectations still appear to be rising.

So I still think Newmont has some upside left. And right now, I'm not inclined to sell any until we hit that $100 level--though like you I'm watching it closely and reserve the right to change my mind. YTD gains of 130% don't happen very often in a conservative, dividend portfolio.

Roger Conrad

4:40

Newmont is using spare cash to buy back stock but I think a higher cash dividend is increasingly likely the longer gold prices remain at these levels.

Hans

4:44

Elliott, Since CNQ is not in the EIA portfolio, is this a good investment

Elliott Gue

4:44

While neither are in the portfolio right now, we fundamentally like both CNQ and SU. Last time we wrote them up we had buys on both. We have been planning more of a deep-dive into Canadian energy names for a while now as a feature article, so look for that in future.

OVV is the name we recommend that has the most Canadian exposure via the Montney Shale and exports of LNG via LNG Canada facility on the west coast of Canada.

Alex M.

4:46

Hi Roger. Is HTO starting to get interesting at these levels? Thanks.

Roger Conrad

4:46

Hi Alex. I think it is for conservative, patient investors. Though my favorite water utility is still Essential Utilities (NYSE: WTRG), I've rated the former SJW a buy at 60 or lower.

The dividend is safe and rising at a reliable mid-single digit percentage annual rate. And the company continues to expand its reach with conservative acquisitions, with Texas a particular focus. I think the larger US water utilities will eventually get some credit for data center growth servicing. And though HTO is one of the larger water utilities, market cap is still under $2 bil, so it's a takeover target as well.

4:50

National Fuel Gas (NFG) at $92+ is trading at a high, and I think that Roger is suggesting selling some above 86. Can you discuss your opinion on NFG - why the great increase, and future prospects - I am wondering whether and if so how much to sell.

Roger Conrad

4:50

Hi JJ. Yes, National Fuel Gas is a great company and I still very much its integrated model of combining a regulated utility and pipeline company with gathering and processing and oil and gas production operations. The deal with EQT to supply gas to a western Pennsylvania data center project will be I think the first of many such projects.

That said, we're up more than 50% year to date in a stock that's historically moved steadily higher rather than by rocketing up. I'm not saying to sell all. But booking a little profit is a good idea, particularly if you got in it when I first put it in Conrad's Utility Investor.

Lee

4:53

I don't recall, do you have a buy up to on PBF? Thanks

Elliott Gue

4:53

We don't recommend PBF in the long-term portfolios in Energy & Income Advisor. In the trading service, CT Trader, we have it as a buy under $35.

4:59

This question is on AI. I am wondering if BEP might have a chance of becoming a hot stock as you might have suggested due to their holdings of Westinghouse. How good is Westinghouse as far as nuclear technology, how does it compare with GEV and other possible builders of nuclear power.

Roger Conrad

4:59

First, BEP has returned 17.4% year to date, so it's beating the S&P 500 by four points. But I think two things are holding back from going even higher faster, neither of which have anything to do with company performance or prospects for growth.
One is having "Renewable" in the name, and skepticism from investors about the monster contracts they have to supply Big Tech with wind, solar and storage. This company has a massive opportunity to boost profits from its hydro fleet--there's already a Big Tech contract in place--as existing contracts come off. And Westinghouse is the leading US nuclear power company--though the attention is all going right now to earnings-less companies like OKLO et al. GEV for the record is a better play on gas turbines.

I think BEP will eventually get more credit for owning 51% of Westinghouse, which is already generating rising cash flow. But the other thing holding back gains for BEP is the fact it's an MLP, and big institutions own Brookfield's C-Corp option BEPC.

Roger Conrad

5:00

BEPC is up about 28% YTD.

I think we just have to be patient with Brookfield. I look forward to a strong earnings report and guidance update in early November.

5:05

Another more general AI question. Can you discuss what stocks that you follow that might have a shot of becoming explosive AI related hits. I know about the ones like CEG, GEV that are already hot but for years were outcasts. Wondering what others you might imagine that could take a similar path?

Roger Conrad

5:05

I think eventually we'll see a lot more interest in Brookfield Renewable--which I just discussed. A 3 GW contract to supply Google adds to the 9 GW with Microsoft that's already building out.

I also look for AES and NextEra Energy to report another big quarter for renewable energy orders to Big Tech data centers.

What will light a fire under these stocks is the growing realization that nothing the Trump Administration is doing is threatening their current revenue, market share or future business growth. That's only going to happen when there are a few more quarters of strong orders and guidance. But if AI fever continues and the market avoids a crash, all of these stocks should see a great deal of upside. They're doing the business now. They just haven't received the credit yet.

Arnie S

5:05

Hello and good afternoon...

Roger Conrad

5:05

Hi Arnie. Welcome to the chat.

Mari

5:06

Gentlemen ,
Is creation of Stablecoin will have any effect on utilities and energy? Thanks

Roger Conrad

5:06

Hi Mari. To the extent it increases demand for electricity it should be positive for earnings growth. Companies will have to win contracts and manage costs. But all else equal it's bullish for these sectors--even as they start to see benefit from their leverage to AI-related growth in demand for electricity.

shellco

5:08

I have held Essential Properties (EPRT) since it's IPO. It has more than doubled since the IPO, but it seems to have lost traction lately. Any comments you have on this stock would be appreciated.

Roger Conrad

5:08

Hey, hopefully you saw my answer to your question that you posted earlier in the chat. Short answer is basically that I think the stock would be a buy on a dip to mid-20s. The business still looks solid and residential REITs are due a rebound as supplies of apartments tighten the next few years in key markets.

Roger Conrad

5:09

Residential REITs have slumped the past couple years because of a surplus of apartments in key markets. This is business as usual in REIT investing--I look for share prices to head higher the next few years.

shellco

5:10

Sorry I sent another question before reading further down the page.

Roger Conrad

5:10

Not a problem. Good question. Residential REITs are a focus of mine in the REIT Sheet.

Delray

5:14

Apartment REITS have been weak this year. Do you have any favorites to play for a recovery?

Roger Conrad

5:14

Now that's a timely question considering the last one. I have recommended several apartment REITs for REIT Sheet readers.

And if anyone is interested who hasn't seen TRS, I invite you to contact Sherry at 877-302-0749 for more information, M-F, 9-5 ET. I've also sent out a video message recently talking about some of the opportunities in REITs.

I do see this sector as uniquely attractive--both because it tends to be very stable in downturns and because it's coming out of a downcycle with supplies tightening. The past few years have seen a number of properties hit the market especially in the SunBelt that were started in the era of low interest rates. But new development with rates higher has been much less--so much less supply is going to hit the market the next few years.

The name I'll give everyone here is one of the larger ones with a focus on the SunBelt--MidAmerica Apartment Communities (NYSE: MAA). But TRS readers can look forward to a lot more.

Dan N

5:24

Hi Roger- I recently took advantage of the price recovery in ES to trim my position and reallocate to diversify my holdings (buying POR, which Morningstar has been pounding the table for as their favorite undervalued ute). Given recent behaviors, I have no confidence that this administration will take a court rebuke of their last offshore wind stop-work order as final, and I expect they’ll make up another doomed-to-fail excuse shortly… because disruption can accomplish the goal even when courts rule against them.

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