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June 2026 Capitalist Times Live Chat
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AvatarElliott Gue
4:51
Give me pause about getting too bearish tech here. I also watch short interest in individual stocks. You can get this from FINRA 2 times per month. Usually, I look at that in two ways – short interest as a percentage of the float (anything over 10% to 15% raises my antennae) and the short interest ratio, which basically tells us how many days it would take to cover the shorts at the average daily volume. So, if a stock is strong, breaking above technical resistance and my read of the fundamentals is constructive I’d regard high short interest as an added tailwind. We have seen some short squeezes in stocks like CRK, outlined earlier in the chat, from time to time. It’s basically a piece of the puzzle for me though I’d never use it in isolation.
Dan N
4:52
With shareholder approval out of the way, are there any clear signals for how state regulators feel about the AES acquisition?
AvatarRoger Conrad
4:52
One situation I've been watching closely for clues on that is Centerpoint Energy's (NYSE: CNP) sale of its Ohio natural gas distribution utility to National Fuel Gas (NYSE: NFG). Both are CUI portfolio recommendations. And this deal is a clear win-win for both--NFG doubles its steady utility operations to balance nat gas production and CNP get cash to fund Houston area CAPEX.

The big news this week is Ohio regulators have conditionally approved the deal. It's still expected to close in Q4 because of timing issues.

Electricity rates are more an issue now and the buyer of AES is a private capital consortium--whereas the Centerpoint deal is utility to utility. I'm not certain if either factor will make a major difference to the commission. And my expectation is Ohio regulators approve this deal with conditions as they did the CNP/NFG deal. But as I said, I'm OK holding AES now whether this deal succeeds or fails--we get a small gain and dividends if it passes and will still own a company that's worth a lot
AvatarRoger Conrad
4:52
more than its offer if this deal fails.
Thomas C
4:54
Thanks Elliot.
AvatarElliott Gue
4:54
You are very welcome.
Frank
4:56
Canadian Natural Resources CNQ has indicated that when they hit a $13B debt target (which they are close to now) that they will return substantially all their free cash flow to shareholders. They are well positioned for the Asian LNG market; long-life oil sands reserves that had their main Capex upfront; more supportive Canadian govt. Looks like the Exxon of the north. Surprised that this one is not in a highlighted portfolio other than just the Canada/Australia list
AvatarRoger Conrad
4:56
We like Canadian Natural Resources (TSX: CNQ, NYSE: CNQ) and it's rated buy in the "Canada and Australia" coverage universe. That's a good place to look for recommendations if you want something outside the model portfolio. CNQ yields about 4.4%--really not high enough to be in the High Yield Energy List. I would also point out that the Model Portfolio does have several stocks set to benefit from Canadian oil and gas exports--Ovintiv (NYSE: OVV) as a producer and Pembina Pipeline (TSX: PPL, NYSE: PBA) as a midstream stand out.
Jimmy
5:00
I certainly voted against the AES arrangement as it seemed like a giveaway.  Seems only a handful of owners shared this sentiment. Maybe they just thought under the circumstances, $15.00/share was fair.
AvatarRoger Conrad
5:00
I also voted my shares no to the deal. As I said, I think at a time when the stock market is increasingly uncertain and volatile--and utilities have given ground lately--a lot of investors just decided to take the cash now, rather than bet on AES' long-term recovery.

I still think we want to keep holding until this deal either closes or regulators reject, which I think is unlikely. If it closes, we get a nice return from this price as the price closes the gap to the offer and we get at least two more dividends. And if it doesn't, we have a company with a lot of great assets and a strong growth profile of 7-9% annual earnings growth based on approved utility CAPEX and contracted renewable energy assets.
Dan N
5:06
Am I nuts for thinking that the AES buyout could eventually benefit CWEN? If interest rates eventually go down (not holding my breath) to support cheaper financing, wouldn't the AES merchant fleet and development pipeline make for many more suitable assets for dropdowns?
AvatarRoger Conrad
5:06
It's something I've mentioned in the past. Blackrock is after all 50% owner of Clearway Group, which is the primary owner of Clearway Energy. AES is a larger platform with regulated utilities attached. So we could also see a bid at some point for Clearway Energy--which at a similar valuation to Brookfield's purchase of smaller Boralex would put the stock at 70-80.

In any case, consolidation is a good thing for all the companies in this business, as they wrestle with financing at a time of higher for longer interest rates. And any combination/cooperation of supply chains and development pipelines cuts costs, which lowers the bar for future returns. Bigger players can also deal better with opaque US government trade rules--as well as this government's intervention in the electricity business on behalf of its "favored" resources.

This deal is a good reason to own CWEN in other words.
Susan P
5:06
I haven't had a chance to read your EIA issue that came out today, so apologies if my question was addressed within the "De-escalation" commentary. The media buzz suggests the SofH will never be the same after this year's developments. The Saudi's construction of pipelines to circumvent that waterway is an example. It may be too soon to know but do any companies come to mind that would benefit from that kind of construction, particular shippers an/or others names (e.g. SLB) that might be positively impacted? Again, it's early but you guys have such foresight, it seems worth asking. Thanks much.
AvatarElliott Gue
5:06
Thank you for coming to the chats and asking great questions! I don't know how long it will take to restore normal flows through the Strait but some changes are likely permanent. I would not be at all surprised to see more countries invest in alternate routes to get around SoH. This certainly helped Saudi and UAE during the recent conflict. Iran also actually built an export facility that was designed to get around the SoH though they only managed a few shipments before the pipeline started leaking (apparently). I would imagine the services names would play a role -- SLB and HAL, BKR too particularly on the gas side. I also think that the other likely permanent change is that countries are going to be reluctant to rely too much on Middle Eastern supplies of oil/gas/refined products and fertilizer/chemicals. It's an energy security issue. Sadly, Europe has made this same mistake twice in 5 years -- by relying on Russian gas too heavily in 2022, sparking energy crisis #1 and then by relying too heavily on Qatar
AvatarElliott Gue
5:06
replace Russian imports this year, sparking energy crisis #2. The results have been devastating, particularly for the EU's industrial base. SO, I do believe this is going to spark increased interest in investments in other regions to secure supply -- Latin America, offshore Africa and even parts of Asia are likely to see stepped up CAPEX in future. So, that would definitely be a tailwind for the services names, deepwater drillers and infrastructure names. Right now, no one cares because the markets are focused on trading headlines and unwinding geopolitical trades. However, I still think that's the story that will emerge over the next 6 to 9 months. Tankers are also interesting  -- it's a group we've looked at more closely in recent weeks. But parts of the industry will likely benefit from the need to transport (for example) refined products over longer distances to offset the loss of domestic refining capacity.
Dave
5:12
Hi Roger -- is there anything company-specific behind the recent decline in share price on Clearway Energy (CWEN)?  Thanks!
AvatarRoger Conrad
5:12
Hi Dave. No there's not. Q2 earnings are expected out around August 4. And there's every indication they'll reaffirm guidance then--which they actually increased after Q1 results. They also raised their dividend again and it's now 3.3% higher than at the beginning of 2026 with two more boosts ahead. Also the only analyst opinion recently was a boost in the 12-month price target--my vote for most useless indicator but nonetheless a sign there's been no deterioration in analyst views.

Stocks fall for a wide range of reasons. It could be sellers are lightening up on energy in general, or dividend stocks. But Clearway has strong parents and is firing on all cylinders as a company. And the recent dip is a good time to add some shares.
Dave
5:22
Hi Roger, the shares of Pebblebrook Hotel Trust (PEB) have made a nice advance over the past six-nine months.  I wanted to ask if you could please provide your thoughts on it if this is a REIT that you're familiar with?  Thanks!
AvatarRoger Conrad
5:22
I do track several hospitality REITs in the REIT Sheet. Anyone interested in my favorites should contact Sherry M-F, 9-5 ET at 877-302-0749.

The key in hospitality is franchise resiliency. And it's not always a given. I took a loss a few years with a company called Sotherly Hotels (NSDQ: SOHO), which actually has just been purchased in a take under by a private capital firm. They had a great concept refurbishing hotels into destination spots. But the pandemic killed them. In contrast, Ryman Hospitality (NYSE: RHP) is embedded with the Gaylord and other majors and continues to thrive.

I think PEB is probably a lot more like SOHO than RHP. There's been basically only a negligible dividend paid since 2020. Recent results have shown improvement. But the business travel they depend on is cyclical.
Willy
5:28
Roger, I’m sure you will get others asking as well, but what is the future of these telecoms: T, VZ, TLUS and T-MOBILE? Also, you follow FTI as a hold, but how does its future look as a purchase?
AvatarRoger Conrad
5:28
Hi Willy. We still favor Baker Hughes (NYSE: BKR) and SLB (NYSE: SLB) in the energy services provider space. As the April 28th piece Elliott wrote on the sector, we see a great deal of opportunity for companies positioned to capitalize on importers and producers move to boost CAPEX outside the Persian Gulf and the focus on technology to boost yield from operating fields. That will benefit these companies most. FTI and others will be more interesting as the energy cycle reaches the point where producers actually ramp up output. it could also be a takeover for a larger player.

I have said pretty much everything I can regarding the recent SpaceX fear selloff of telecommunications stocks. I think investors who jump and dump now based on rumors are going to come to regret it.  In any case, I'm keeping my positions in these stocks. Even TMUS looks cheap these days.
Frank
5:30
I've been investing for 60 years (I started young, lol) and have never seen anything like these monthly chats. Not only are they informative, but they serve to allay people's fears and solidify resolve. They also give a deeper dive into the minds of both of you, and keep these investment ideas fresh. Kudos to both of you and I believe I speak for a lot of others that feel the same way
AvatarRoger Conrad
5:30
Thank you for that Frank. We get a lot out of them too. Not just seeing what our customers are thinking about--but it's also so valuable for testing our thinking. I am very grateful Elliott and I do them together though!
John A.
5:31
Any terms announced on AES buyout? Thanks.
AvatarRoger Conrad
5:31
Terms are still $15 in cash per AES share. The expected close later this year or early 2027. Shareholders have now approved. So it's now in the regulators' court, with Ohio the one to watch.
Willy
5:37
Roger, In case you haven’t already commented, what is the future of the telecoms? They are as weak as water. Also, you cover FTI as a hold, but what are their future prospects as an investment? Its price action is pretty good, but when might it be a buy? Thanks so much for your guidance. Hope you and Elliott have a great 4th.
AvatarRoger Conrad
5:37
Hi Willy. Hopefully, I answered your question fully just now. One thing I would add is even after the nonsense today, Verizon is pretty much matching the S&P 500's year to date return. AT&T and TMUS are underwater a like amount (-15%), not great but not a total disaster. It feels worse than it really is.

Have a Happy 4th! I have a feeling the second half of the year is going to be kinder to these stocks--

not so sure about SpaceX from a price of 34 times expected FY2027 sales and 854X projected FY2027 earnings.
Jack A
5:37
Hi Elliott:  With the establishment of the Memorandum of Understanding, I was expecting SLB to go up in price, but the opposite has happened.  What do you think is behind the move?  Thanks.
AvatarElliott Gue
5:37
I'd guess there are two main factors. 1. Concern about their guidance. Recall that the stock sold off in early March due to concerns about the need to demobilize operations in the ME, rising costs and pushing revenues to the right. Once they quantified the impact, the stock recovered and then pushed to multi-year highs following their April earnings release. In their last call, they penciled in a gradual return to work in the region starting in June and I suspect that the headwind will drag on longer than that, which will probably force them to lower guidance for Q3. I do think that this effect is in the stock at current prices and that once they quantify it, probably during or just ahead of next month's call, the stock could recover as it did last quarter. 2. I think the more important driver is just what I'd characterize as generalist selling of energy. A lot of active fund managers came into 2026 underweight energy and then kind of panicked into the sector in March, driving most stocks higher. They were
AvatarElliott Gue
5:37
also chasing the Hormuz headlines and, in the futures market anyway, appear to have been caught up in the calls for $250/bbl oil we were hearing not long ago. Now they've exited en masse, regardless of fundamentals. The reason I say that this is the more important driver is that most stocks in energy are down by a similar magnitude (adjusted for their normal underlying volatility) since the recent highs. That's the hallmark of indiscriminate generalized them-selling rather than company specific fundamentals.
Alex M.
5:39
Hi Roger.  What are your thoughts on the proposed CMCSA break-up?  Attractive at these levels even without the dividend growth we've experienced in the past?  Thanks.
AvatarRoger Conrad
5:39
Hi Alex. i'm definitely getting interested in Comcast at under $25 and a yield of 5.4% with growth in their future. I'm not one who believes SpaceX buying the company to enter the wireless business makes any sense. Comcast rents Verizon's network to offer the service. But a well planned spin will create value. And it's come down a long way from when I sold it from the CUI Portfolio. I'll have more on it in the July CUI issue, which will post Monday.
Susan P
5:45
Hope you guys can have a little time for yourselves on over the 4th. Direct me accordingly if my question has been asked previously: Comcast and Charter have gotten a lot of attention with this week's news. Wondering if Comcast's 5+% yield offers income-oriented investors any consideration. Also, Charter's plans with Liberty Broadband seem to be on track for next year this time. There is a Liberty Preferred, trading below par and yielding over 7%, that will trade under Charter's name after the deal. It's dividend is cumulative and the preferred has a mandatory redeemption into Charter shares in 2039 (i.e., it's not perpertual). In theory It's a way to be invested in Charter but get a decent income stream that is taxed at the qualified rate. Any thoughts on this Charter/Liberty idea and Charter's longer term potential or lack thereof? As always, great thanks are felt for both of you.
AvatarRoger Conrad
5:45
Hi Susan. Yes, I think we're definitely thinking along the same lines here. Comcast and Charter started selling off a while ago when it became clear the Big 3--T, VZ, TMUS--were starting to take their broadband customers, with the fiber/fixed 5G wireless product combination. And it's a safe bet both will report more losses next month when they release Q2 results. But these companies are generating a ton of free cash flow. Comcast's spinoffs will create value as will Charter's merger with Cox. And these stocks look really beaten down at this point. The Liberty Preferred is junk rated as is Charter, and will be after the merger closes--so that should factor into your thinking. But I don't see either company in any danger of going out of business.

The selling of this group just because of some off the cuff comments from Elon Musk is a little silly.
Guest
5:51
Hi Roger: 2 questions from last month's webcast.  First, when you wrote that MPLX's DCF coverage ratio was 2x and now it is 1.3x, does that mean the company had to earn $2 before it distributed $1, and now they only earn $1.30 to distribute $1?  If so, is that good or bad?  Don't we want the company to earn more money before it distributes cash?  What does this really mean?  Sorry that I do not grasp the significance of these concepts!  Second, when you wrote that you expect MPLX "to throttle back to a still robust but more sustainable mid-single digit percentage dividend growth rate", does that mean MPLX's prior comments that they intend to increase their dividend by 12.5% each year for the next 2 years is NOT something that we investors should reasonably rely upon?  Thanks, Barry
AvatarRoger Conrad
5:51
Hi Barry. I think unless MPLX boosts distributable cash flow by a lot the next couple years, the rate of dividend growth is going to slow a lot. The coverage ratio is basically distributable cash flow covers the dividend by 1.3X, which equates to a payout ratio of 76.9%. That's not excessive considering the recurring nature of revenue. And MPLX' dividend is still "safe."

To answer your second question, I don't see any reason to doubt MPLX will raise its distribution per management guidance. For one thing, it's what their majority owner Marathon Petroleum wants. My only point is the lower the DCF coverage ratio goes, the less room MPLX has to raise dividends further.

On the other hand, if they froze the dividend right here, the yield would still be attractive at a little under 8%.
Dave P
5:54
Thought an update on AES would be top of the list.  Results of the investor vote?  Shareholder suit?  This one is looking like a bigger and bigger SNAFU.
AvatarRoger Conrad
5:54
Hi Dave. I'll be sharing my thoughts on AES Corp in the July issue of CUI, which will post Monday. But my advice hasn't changed following the results of the shareholder vote.

Not sure what you mean by SNAFU. But as I've said, I still intend to hold my AES until either regulators approve and this deal closes or regulators reject it and it fails. I don't know of any shareholder suit against the deal. The vote was pretty strong in favor by all accounts.
Guest
5:58
Hello Roger:  CWEN has fallen about 7% in the last 2 days and a total of 17% since June 3.  I cannot find any events on their website which might explain the drop in the last 2 days or since early June.  Any specific events causing this or ideas which you may have?  Thank you for holding these monthly webcasts!  Best,  Barry
AvatarRoger Conrad
5:58
Hi Barry. I don't think there is any company specific reason for Clearway Energy to sell off as it has recently. A lot of energy stocks and dividend stocks have weakened recently, as it's become clear the Federal Reserve will hold interest rates higher for longer.

I think well get a lot more clarity on the company when it releases Q2 results and updates guidance, probably in early August. But we did get another quarterly dividend increase, this one a bit higher than what we saw in Q1. I also think it's possible a successful Blackrock takeover of AES could benefit the company--Blackrock owns 50% of Clearway Group, the majority owner of CWEN.

Hang in there. This is a stock I also own.
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