JotCast | February 2026 Capitalist Times Live Chat | 2/25/2026

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February 2026 Capitalist Times Live Chat

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JVA

4:27

Are new data centers anywhere near MAA properties? I started acquiring MAA in 2016, adding since then. Thanks.

Roger Conrad

4:27

Mid-America's properties are located in areas where large commercial/industrial companies are locating--and that does include data centers. The job growth is generally positive for demand. And management affirmed underlying strength in local economies in most of its locations during the Q4 earnings call.

Data centers are also drawing scrutiny from many local communities for their demand on local water and energy supplies. And the plan in Congress to limit local environmental oversight will only increase local opposition. That said, I don't see this as a major issue for MAA. The big one is the absorption of the new supply that came on the market the last couple years and the REIT holding onto occupancy and rents as that happens. Q4 results show it's holding its own. And it's well positioned to capitalize on the lack of new builds the past couple years--which mean shortages in 2-3 years in many areas.

JVA

4:34

Any updates regarding SOBO? Their dividend keeps piling up in my IRA. Thanks.

Roger Conrad

4:34

I had thought South Bow would be basically a cash cow for us in the various portfolios, with low single digit percentage dividend growth and a slow but steady share price. And I thought the end game would be a high premium takeover by a larger oil player, possibly as a bet on a revival of the northern leg expansion of the Keystone XL pipeline.

All of that may still happen. But South Bow has also emerged as a potentially a major winner from Canada's energy sector revival--as Ottawa under PM Carney has gone from oil and gas energy antagonist to chief promoter.

We're going to get earnings March 5--just in time for the March CUI and CUI Plus, a little later for EIA. I don't expect anything other than steady Keystone XL system-led revenue and cash flow. And the stock looks a little pricey to buy at 32. But I'm more than happy with how its performed since spinning off from TC Energy. And I'm sticking with it at this point.

Dan N.

4:51

Good morning Roger - thanks again for hosting the monthly chats.
1. I'm kind of stunned that EIX has recovered so much lately, now trading in the mid-70s. To borrow an Olympic metaphor, is EIX too far out over its skis?

2. Your thoughts on the recent ET results?

3. Looking at XIFR results, I noticed that they led off with a new battery deployment agreement with NEER and tout the 'monetization' of their excess grid connection capacity. Thoughts? Will the market not care until the next creative debt package is resolved? (I noticed they said 'evaluating options' this time, which I think might be a backtrack from 'sale of underlying assets.') (cont.)

Roger Conrad

4:51

Hi Dan. I think what's happening with Edison International is investors are becoming more comfortable they're going to be able to put liability from last year's wildfires behind them. Management said in the earnings call that it's "currently unable to reasonably estimate a range of potential losses" from the Eaton Fire. But the company beat the high end of guidance for 2025 results released last week and 2026 guidance were solid, Edison also extended earnings growth guidance of 5-7% a year through 2030. And it announced substantial progress on the regulatory and legal front for Eaton Fire claims. There's still a lot unknown here. And I'm not willing to chase EIX over 75 right now. But the gains to date are tracking with developments in the field.

I though Energy Transfer's Q4 results were solid--I recapped them in the Portfolio Update section of the EIA issue that posted today. And I had more comments in the Roundtable discussion. Bottom line: ET is executing its plans and the shares are still cheap.

Victor

4:55

Hi Elliott, what is your opinion gold. Do you think that this uptrend will continue? Some people believe that $7000/oz by the end of this year. On a separate note, how do you feel about TLT as rates may come down this year?

Elliott Gue

4:55

Long-term I like gold. I've written before about a longer-term target north of $8,000/oz for gold and $200+ for silver.

I've recommended gold and silver via the GLD and SLV ETFs as well as a royalty stock, Wheaton Precious Metals (WPM), in my Crating Wealth/Free Market Speculator model portfolios for about 3 years now. That said, I started taking partial profits on all of these recommendations late last year as silver, in particular, went a bit parabolic for my taste.

My sense is that we'll see these targets eventually but it could take longer than just this year. So, my view is that the correct strategy in gold/silver and related stocks is to hold some exposure, and look to add some on dips and then sell the "rips" -- take partial profits on the parabolic upside moves we see from time to time.

I recommend a small(ish) position in TLT in my Smart Bonds service. However, TLT is basically 30-year bonds and I suspect yields on the 30-year will remain broadly range bound as then have been since 2023.

Elliott Gue

4:55

In that environment I really like TLTW, which is basically an ETF that owns TLT and then sells covered calls on the ETF to generate additional premium income (and a higher yield). I also think there are even bigger opportunities in bond markets outside the US, particularly in emerging market bonds where you get a nice kicker from the currencies as well as the higher yields.

Roger Conrad

4:57

XPLR infrastructure has a large number of opportunities to match battery storage with grid connections, as well as wind and solar facilities. And as it executes on them, it will boost cash flow, which will enable them to accelerate debt reduction. I agree that the key issue for the company is still to eliminate the 3 remaining CEPFs--and the language change is somewhat encouraging (good catch!), as it would obviously be better if they can find a way to retain the productive assets. The stock did move back over $10 with the Q4 results. But this one is going to take time to go from rags to riches. It will get there if the company continues to execute and NEE is still supportive, which remains to date.

Hans

4:59

Elliott, BTU double the price since August what is your outlook for this year. Thanks

Elliott Gue

4:59

We recommend BTU in some of the trading services and are generally bullish longer term. I like their strategy of using the US thermal coal business as a cash cow while expanding into Asia met coal. Technically, the stock is basically consolidating after a really nice advance to the October 2025 highs. My view from a trading perspective is that consolidation ultimately resolves higher.

Dan N.

5:07

4. Any thoughts on ELPC (Brazilian electric ADR, COPEL)? Similar to CIG, possibly add to coverage universe? Foreign investing in income stocks in retirement accounts has some limits when trying to minimize withholding from dividends - Brazil is one of the few countries that has no withholding, which is why I've put my CIG shares in retirement accounts. Would be nice to have more quality options with no withholding.
5. POR announced results along with the purchase of WA State assets from Pacificorp (Berk Hathaway), and the stock price dropped a couple points. Any thoughts on why? Is there perhaps a general presumption of buyer beware from Berkshire, in the sense that no one is thought to get the better of a deal with them? Or a general statement on doing electric business in OR/WA right now, since Berkshire has more cash than they can invest, and they're choosing to sell rather than invest in the business?
Thanks--

Roger Conrad

5:07

Always good questions Dan. Brazil like the US and UK is one of the countries with a number of publicly traded electric utilities to choose from. I've liked CIG because of its support in Minas Gerais and hydro exposure--and the combination of paying out generous and frequent dividends along with the lack of withholding tax is a plus. I can't cover everything. But I will take a look. I would say the big risk with these is always political. But the second Lula regime has been generally positive for the Brazil electrics.

It's typical for investors to sell shares of companies making major acquisitions, regardless of industry. I think this deal has solid industrial logic--geographic proximity, similar regulation and the ability to add low cost, efficient generation. I think Berkshire under new leadership is adjusting its portfolio as expected. So I think this is more of a win-win than a party taking advantage of another. POR also has a partner in Manulife, so there's been addition due diligence.

Alex M.

5:15

Hi Roger. With Dish defaulting on its lease payments to the tower companies, what are your thoughts on the road ahead for AMT? Do you think they'll be able to recover the rent that is owed to them? Thanks.

Roger Conrad

5:15

Hi Alex. American Tower management has stripped DISH revenue and the defaulted payments from its 2026 guidance. And it's still projecting overall revenue and cash flow growth--as the data center business, global tower operations and even the US tower business are seeing growth. I think we'll see a dividend boost next month as has been management's practice. And the balance sheet and investment plan stay intact.

Will they recover the owed rent? During the call, management said it would be pursuing all legal remedies. And after selling all of that 5G spectrum, DISH parent Echostar (NSDQ: SATS) certainly has the money to make good on it.

I think the likely outcome here is some kind of settlement. And any recovery at all should be at least a minor positive for the stock. But the important thing is DISH is no longer in AMT's plans or guidance, or valuation. Selling today is mainly the result of 5 investment banks cutting 12-month price targets--of course the lowest of these is still $220.

Roger Conrad

5:16

I will also say that investment bank 12-month price targets get my vote for "most useless indicator" for future stock performance. But in any case, AMT looks cheap and well positioned for strong gains this year.

Jon B

5:21

Hi, what do you think about South Bow eclipsing 32? Seems pricey. I thought dividend growth (if any) was very constrained for the next couple years and with Canada racing to bring other pipes online going to the coast, this might put some pricing pressure on SOBO contract renewals.

Roger Conrad

5:21

Hi Jon. It's not dividend growth driving the SOBO train but the company's unique position in Canada--where the federal government has transformed under PM Carney from chief antagonist to promoter/facilitator in chief.

South Bow in fact has seen some pressure on the roughly 10% of cash flow that's not locked in by capacity-based contracts over the past year. That was the result of the Trans Mountain expansion. But it was not nearly enough to pressure the balance sheet, dividend or balance sheet. And there are signs of firming, which I think we'll see more of March 5 with with the Q4 results and guidance. But for the first time in many years, Canada is ramping up oil for export, even as the first LNG export capacity comes on line.

Roger Conrad

5:22

SOBO is a little expensive to buy here but I may raise the buy target depending on what we see March 5.

Alex M.

5:31

Hi Roger. With respect to small water players, what are your thoughts on GWRS and CDZI? Thanks.

Roger Conrad

5:31

I think the US water sector increasingly favors scale--the cost of ensuring safe drinking water and wastewater processing is only going to rise in coming years. And smaller systems--even municipal systems where the local government is strained--are not keeping up. Investor owned water companies--even small ones--can access capital markets by selling stock. But the ongoing merger between American Water and Essential Utilities is a clear sign even the biggest want more scale. And I think MSEX, ARTNA and others are going to want to do deals eventually. I think both Cadiz and Global Water could see a takeover offer as well. I will also consider adding them to coverage. Thank you for bringing them to my attention.

Sohel

5:36

Hello Roger, Many MLPs have run up quite a bit in a pretty short period ... is that justified? I'm looking at my EPD, ET, WES, PAGP holdings. Your thoughts on KMI it's well in excess of its buy below $24 target at 31-31 ... has it runs it course?

Roger Conrad

5:36

Hi Sohel. I think you want to stick with the discipline of not buying these stocks above those buy prices we've set. And we've also set profit taking prices for every stock we track. If they get above those levels, it's a good idea to take some money off the table with a partial sale.

Energy is hot and we think we're in at most the middle innings of this long-term up-cycle. But nothing moves in a straight line. And selling a bit with the idea of buying back on an inevitable dip is how we're going to get the most from this cycle. ET and PAGP by the way are still below their buy prices--so it's still possible to buy low.

Victor

5:37

Hello guys, I was unable to login earlier. I just wanted to say, it's great to see that the model portfolio is beating the S&P 500 and the Nasdaq YTD. It seems to me that the portfolio selection is gaining momentum with all stocks doing very well. I can see that 98% of the stocks in the portfolio are trading above the 200 day MA. I feel that the portfolio is almost like a good hedge against the overall market. With Trump in office and all the red tape that he is cutting, do you think that we are finally seeing a renewed interest in the energy sector? Do you expect this trend to continue? Great job guys!

Elliott Gue

5:37

Thanks for the question and the kind words. Yes, it's interesting because I keep hearing a lot of people talking about the weak market and the "tough tape" which is ironic given that the S&P 500 is less that 0.5% off its all-time closing high.

The reality is that what we've seen since late last year is just that the former leaders -- stocks that people who index to the S&P 500 and Nasdaq 100 own a lot of -- aren't doing well on an absolute or relative basis. Meanwhile groups like energy, small caps, industrials are soaring.

From a valuation perspective, the S&P 500 is close to the same valuations as in late 1999 overall. However, if you drill down and look within the market that's not the case -- the average stock in the S&P 500 is actually far cheaper today than in 1999 and Energy is trading at a 9 turn discount.

My view is this is all part of a "Great Cycle" that we've seen play out over 100+ years, most recently in the 2000-2011 period and before that in the 70s. It's when the expensive US growth

Elliott Gue

5:37

stocks take a breather, stocks overall produce subpar returns, but you see strength i commodities and global stocks ex-US, a weaker dollar. My view is this cycle will continue past 2030. Late last year no one cared about energy or oil -- speculators were as bearish oil as any time in the last 15 years. Before this cycle is finished I think a lot of people will be talking about energy.

Jim T

5:43

Please giv an update of current ourlook for HE.

Roger Conrad

5:43

Hi Jim. I think Hawaiian Electric is moving toward a full recovery in the next couple years--including restoring the dividend. Next earnings are Feb 27--so later this week. I expect to hear more progress on the wildfire settlement, as well as efforts to wean the system off of very expensive fuel oil-fired power plants.

Jim T

5:49

Roger, What are you current outlooks for AES and AQN.

Roger Conrad

5:49

Hi Jim. I think AES will report solid Q4 results on Friday. And the agreement with Google in Texas are pretty solid evidence it remains a preferred provider of energy for AI-enabled data centers. Bloomberg New Energy Finance also named the company the top provider of "clean energy" to corporations in 2025, with 85% of renewable energy contracts signed last year with corporate customers. The takeover rumors are still in the background. But I think this company will continue to prove its earnings growth does not depend on tax credits. And as it does, the stock will continue to move higher.

Algonquin reports March 6 and I expect to see it meet 2025 guidance and report solid progress with strategic cost cutting and reducing rate lag. The play here is for the company to stick to its multi-year recovery plan-every sign it will and it's a cheap stock. AES trades at 7.5X earnings. Cheap stocks with safe dividends and a lot of upside.

Susan P

5:50

Recently, Elliott's FMS added a smallish position in Ares Capital (ARCC). As he explained, its track record since 2004 shows navigation prowess in good and not-so-good environments. Private credit concerns has made 2026 a bit bumpy for ARCC but over the last few days, it has been holding its own. Yielding 10% as of today (2/25), I am thinking it might be a good time to initiate a position. 21 years of consecutive distributions, with the only shaving occurring during the GFC, is impressive for a BDC. Thanks for your thoughts.

Elliott Gue

5:50

Thanks for the question. I tend to like to lean against/fade the popular narratives out there, especially when emotions run "hot." In my view that's the case with private credit. I hear people comparing what OWL did earlier this month with the blow-up of some funds with exposure to subprime mortgages back in the summer of 2007, a sort of canary in the coalmine. That's a big step -- in 2007 the subprime mortgage market was somewhere around $1.5 trillion compared to US nominal GDP of about $14.5 trillion. The global private credit market today is about $2.1 trillion globally (not just the US) compared to US GDP of $30 trillion+. Further, the idea that all software companies are now suddenly worthless because of AI and Claude Code seems overdone. Inside these BDCs the exposure to software is significant -- for ARCC it's 23% to 25% of their portfolio -- however, the vast majority of those loans are senior secured loans and they're relatively short term in nature (approximately 5 years). There's no sign of stress

Elliott Gue

5:50

in this loan book right now. So, my view is that the risk of default for ARCC specifically is overdone. So, I still like ARCC. We started with a small position when ARCC was already down well off its highs. But I'd even consider recommending an add to that if we see more signs of stabilization.

Jim T

5:51

Roger, I sent an earlier e-mail, but not sure you received. What are your current assessments of AES, AQN, and HE. Thanks Jim T

Roger Conrad

5:51

Hi Jim. Just answered questions on all three. Bottom line is, while we don't have Q4 results or guidance updates, there's every indication they will report that their recoveries are on track. And that means more gains on top of what they've already given us recently.

Victor

5:54

Hello Elliott, what is your opinion on XOM. Do you see more upside from this level? Thank you.

Elliott Gue

5:54

I actually covered it in a bit more depth earlier in the chat as well. To summarize, XOM is the best of breed in the global energy industry. They invested in all the best projects at the lows of the cycle and now have a superior production profile. Their earnings calls and updates are fascinating -- XOM is basically a tech company right now. They've totally revamped their tech systems since 2018 and are using their treasure trove of proprietary data, enhanced using AI tools, to continually squeeze out costs, improve recovery rates. A good example is their new lightweight proppant -- proppant is used in the hydraulic fracturing process -- that utilizes a low-value by-product of their refineries to increase recoveries by as much as 20%. I endorse the view that XOM will be the first US $1 trillion market cap energy stock.

Susan P

5:58

Apologies if Hess Midstream has been addressed previously. Today's EIA report mentioned last year's distribution increase and management's guidance that growth will continue, even if not as much. I understand Chevron's 38% ownership and the potential it will acquire the rest of the HESM's outstanding shares. I am wondering if Chevron's expected spending regarding Venezuela impacts that potential, either positively or negatively. And, from your past experience watching parent companies buying their midstream "offspring," do you have any guesstimate for the timing of such a move? If CVX does proceed, would owners of HESM receive shares of Chevron +/or cash. Finally, does any entity other than CVX come to mind as a potential buyer. Hess is slightly above your buy-in price, but an approximate 8% yield backed by solid cash flow with the potential to be bought by CVX seems appealing? Thanks for your thoughts and holding these chats.

Roger Conrad

5:58

Great questions on Hess Midstream. Trying to guess who's going to buy who and when is always just that--a guessing game unless you have a seat on the board. And in that case, you're risking going to jail by making a bet.

But all that said, I think (1) CVX has a clear motive to buy out the rest of HESM--which is getting control over those minimum volume contracts Hess Corp had to issue in order for HESM to be a workable fund raising vehicle. They may not want to drill that much in the Bakken. But they have to honor the contracts. And taking HESM private will allow them to pretty much do what they want, just as EQT has saved a great deal of money by taking in its leading midstream service provider and former subsidiary Equitrans. (2) CVX could sell its 38% of HESM to a third party, say a private capital buyer, but it would still have those MVCs. (3) CVX has taken midstream assets private before after acquiring the parent--Noble Midstream earlier this decade about six months after closed on Noble Energy.

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