JotCast | March 2026 Capitalist Times Live Chat

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March 2026 Capitalist Times Live Chat

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Roger Conrad

5:30

Hi Frank. For anyone unfamiliar with Neos MLPI, it's an ETF that holds shares of major midstream companies . At last count, Enbridge Inc, Williams, TC Energy, Kinder Morgan and Pembina Pipeline were the five biggest holdings at 36.5% total. The largest MLP holdings are Enterprise and Energy Transfer at a total of 8.65%. The ETF is organized as a trust so it can be leveraged.

The dividend through the first four months of the ETF has steadily risen--which makes sense given the holdings' dividend growth. But again it doesn't appear to be paid solely from company distributions. The last four months' total dividends are $2.667, which if multiplied by 3 (12 months) would equate to a yield of 14.1%.

My view is you're still best off holding individual stocks--so you exactly what you own. But the YTD return is 17% and the holdings are all solid.

Frank

5:31

Upstream companies are capital intensive, carries a lot of risk, and can have negative earnings. Royalty companies are capital light, share none of the risk, and just collect checks, yet you have only 2 royalty companies but a bunch of drillers. Why so few royalty Co.'s?

Elliott Gue

5:31

The exploration & production (E&P) business has changed a great deal over the past 5 to 7 years. Since most of the E&Ps we recommend are shale producers, there isn't much "exploration" risk as there was traditionally. Everyone knows where the productive acreage is and the oil/natgas is widely distributed under that acreage. Unconventional "shale" production is rally a manufacturing business, not the risky "wildcatter" business that it once was. Capital intensity has collapsed as well since producers basically set their CAPEX based on commodity prices, and targeting a specific level of cash flow, rather than in an effort to grow output. So, a modern unconventional E&P bears little resemblance to the small independent producers 20 years ago. Also, while royalty companies can produce some steadier returns at times, total returns from quality upstream names are superior in absolute terms -- for example, over the past year our two favorite gas-focused producers and up 11.1% on average, our oil-focused upstream

Elliott Gue

5:31

names are up just shy of 40%, meanwhile the average of the royalty companies is between 8% and 9%. So, in our view, there's a place for both types of company.

Victor

5:36

Hi Elliott, COP and DVN had a big run due to current events and the price of oil. Would you consider trimming a position on these two names at this point?

Elliott Gue

5:36

Thanks for the question. A lot of names look pretty extended here and there will likely be some pullbacks in coming months although we believe most of the quality names in the group are in longer-term uptrends and there's significant additional upside over the next 12 to 18 months to come.

We have recommended explicitly booking one-half your profits on two names, VLO and KMI and we'll probably recommend taking some off the table in coming weeks in other recommendations. However, even for names that are not in the portfolio -- like COP and DVN -- our advice is to consider taking partial profits on the way up, even if that means just selling 20% or 30% of the position. This reduces risk and gives you some "firepower" to take advantage of the inevitable dips.

Guest

5:42

Hello Roger and Elliott: Do you have any thoughts about the wisdom of acquiring a non-CUI+ stock by the name of GIS? It has a great yield of 6.6%, and it has been hammered in the last month - dropped about 20%. The dividend has only been cut 1 time in the last 10 years. Or are there better holdings than this? Your thoughts? Thanks. Barry

Roger Conrad

5:42

Hi Barry. General Mills shares on the surface at least look attractive for yield (6.6%) and at less than half their price of three years ago. On the other hand, there's always a reason when a stock underperforms to that extent. Some of the selling recently has probably been due to the Trump Administration's focus on getting Americans to eat more "real" food--also a headwind for Kraft Heinz. But this company is also been retrenching, with revenue falling -8% in FYQ3 (reported Mar 18) and -3% not including the impact of asset sales. Earnings fell in half and were -37% lower adjusted for currency headwinds.

Reading the recent earnings and guidance call, it looks a lot like Kraft Heinz. The company is investing heavily to prop up key brands. And at the same time, it's trying to cut costs to prevent more margin erosion. Through FYQ3, management was reaffirming full year guidance--including a -16-20% decline in earnings per share. But quarterly earnings of 56 cents did not cover the dividend of 61 cents.

Roger Conrad

5:44

Bottom line: General Mills is working hard to stabilize its fortunes but it has yet to do so. And until it does, there's growing risk of a dividend cut and further share price declines. There's also a question of whether the food processing sector is going through some kind of secular decline that could result in an even lower trading range and dividend before stabilization is achieved. I want to see the company steady before I'm going to be interested.

Lorraine

5:45

Would you advise taking some profits on Xom?

Elliott Gue

5:45

We have not yet recommended taking profits on XOM though the stock is way above our current recommended buy under price, so we'd regard it as a hold for now. We do have a series of tables in each EIA issue which reference what we call the "Profit Taking Price," basically this is a level at which we'd consider at least booking some of your profits in a particular name. For XOM, that level is $200 now, so we're still a little below that. Of course, we'll be monitoring the recommendations and may recommend booking more partial profits, as we did with VLO/KMI earlier this month, or we may adjust out buy targets and profit taking recommendations.

Mari k

5:51

Hi Roger/Elliot, I still have a position in Oxy since the time you've recommended the stock. it went up quite a bit now. Is it time to liquidate? if not, what indicator should I use as a sell signal?

Roger Conrad

5:51

Hi Mari. Occidental is up almost 60% year to date, with much of the gain coming since Operation Epic Fury began. Higher selling prices for oil are a big deal for this company, as it continues to deleverage, buys back stock and ramps up its dividend. And plans to refocus on oil and gas production since we sold are also a positive, and a big reason Western Midstream is on the current High Yield List.

When we became more bullish on oil last year, we boosted OXY to a buy at 55 or less on our E&P and Services coverage universe list. That remains the advice. We would take profits on a move to 80 or higher. That information is also in the E&P and Services table, along with the Dream Buy price for all the stocks we cover.

Roger Conrad

5:53

Just another reminder to anyone who doesn't currently subscribe to Energy and Income Advisor, we are offering a 30-day free trial. Call Sherry at 877-302-0749 anytime 9-5 ET Monday through Friday if you're interested.

Elliott Gue

6:00

Another one from my e-mail queue: Hi Elliott
What is holding EXE back? It does not seem to getting the same boost in price we are seeing in EQT or the oil producers?
--JA

The price of natural gas in the US is low – under $3/MMBtu right now. While we’ve seen a big spike in TTF (Netherlands) and JKM (Japan-Korea) that doesn’t immediately translate to the US market because of the limitations on LNG exports (lack of capacity to export more).
In a low gas price environment, the biggest winners will be the Marcellus producers, particularly EQT. They’ve been able to push their breakeven costs under $2/MMBtu. Where the Haynesville-levered producer – EXE (dual basin Haynesville and Marcellus), CRK (pure-play Haynesville) shine is when gas prices get up closer to $3.75 to $4/MMBtu. This is when they’ll tend to outperform a name like EQT. That’s because the move from $3/MMBtu to $4/MMBTu will generate a much larger free cash flow delta for EXE than EQT.

Oil producers benefit directly from higher oil prices and can lock in some attractive pricing via hedging later this year as well – that’s why recos like PR have been so explosive on the upside.
I believe US natgas prices are near a seasonal low in price and we could see a sizable move higher later this year. The Haynesville producers also just lost a major competitor (Qatar) for 2027-2029 volumes, so that’s an intermediate to longer-term win.

Bill D

6:02

Any update on DNNGY. It's seems to be very volatile this past month. I was also looking at PR as well as Val - and other off shore,companies

Roger Conrad

6:02

Hi Bill. The bet on Orsted A/S (DNNGY) is they're able to get six major offshore wind projects up and running by the end of 2027--which will boost cash flow by almost one-third, even as CAPEX declines significantly. That's the point where management has said it will restore the dividend. And I would expect at least a low double-digit share price when that happens.

Where are they on that? The 3 projects in the North Sea and the other in Taiwan enjoy broad political and regulatory support. One of the North Sea projects started up this spring. So did Revolution, one of the two in the US affected by the Trump Administration's stop work order the court overturned earlier this year. So it's so far so good. And Orsted is a buy for patient risk tolerant investors up to USD10.

Permian Resources before oil prices recently spiked was consistently cutting costs while expanding output. It's now gained investment grade ratings. We increasingly see it as a takeover target--though it's now a bit above our buy price of 16.

Roger Conrad

6:04

Valaris has nearly doubled year to date. And we've seen similar action in other offshore drillers like RIG--which is merging with Valaris. The future looks good. But much of the gain is post Epic Fury--it may be a good time to take a little money off the table.

Mari k

6:13

I also have a question about DEA - Do you thing that Federal Gov layoff have stop and we can safely buy the stock? Do you still recommend it? Thank you

Roger Conrad

6:13

Hi Mari. The possibility the US government could exit Easterly Government Properties' leases en masse was a concern of mine last year. And the REIT did retrench a big by cutting its dividend last year to the current rate of 45 cents a quarter.

But the mass cancellations haven't happened. And overall, the DOGE cuts really haven't had much impact on the REIT--which met guidance for low single digit FFO growth in 2025 and appears to be on track for more of the same.

I'm rating Easterly a buy at 22 or lower. It's one of 80 real estate investment trusts I track in "The REIT Sheet." REITs currently are a distinctly unloved sector.

But the best companies ironically are about as bullet-proof as I've ever seen them, as well as poised for growth. Shares are both undervalued and historically under owned. It's a great opportunity to buy low. And very high yields will reward our patience.

Elliott Gue

6:17

Another one from the mailbag: Question: First, wanted to say thanks for the excellent EIO analysis today - it's easily the best dissection of SMA implications I've seen.
Here's the question: does the analysis become more true when concentration risk (the cap-weighted sector overweight nature of $SPX) hits statistically record highs? (That is, might one say "worse things happen under the 200d MA when the $SPX has been at record stock concentration"?)

Or, is this a case of one of those 'ultimately, not really' because the increased volatility of the downward sloping moving average lines is essentially highlighting dispersion from the overly concentrated $SPX? That is, are we actually seeing the resolution of the overweight/concentration risk problem?
Seems like the answer would illuminate hedging strategies, downside expectations, and other trading moves.

6:18

A: While it’s tough for me to prove due to limited data, I would suspect that volatility will tend to be higher for the S&P 500 in the next bear market because of concentration. The reason I say that is that with so much of the index’s day-to-day movement to to 10 to 12 stocks (all basically in the same sector) and very little to 400+ stocks, this can skew the volatility calculation.
Specifically, for several years now, investors have regarded the Magnificent 7 names as basically “defensive” stocks. Because they are dominant in their niches of the industry and benefit from non-Cyclical tailwinds, they actually tended to hold up better than more cyclical value type stocks. So, this artificially depressed volatility in my view. However, thee same stocks were the first to show signs of vulnerability – last summer/autumn—while the rest of the market held up pretty well. If that were to continue, and we see increased volatility from the Mag 7, I would expect overall market volatility to be biased higher.

Indeed, the last time the S&P 500 approached this level of concentration was 1999-2000 and we did see an explosion of vol in 2000-02.
I would also say that while the S&P 500 has broken down below its 200-day, the Equal Weight S&P 500 is now trading back above its 200-day MA as of today. So too the Russell 2000 and the MSCI Global ex-US. Also, some sectors like Industrials and energy of course trade above their 200-days.
So, there are two possibilities I see. Either more sectors/stocks/markets start to catch down to the S&P 500 or the S&P 500 turns and recovers soon following the other sectors/markets higher. Longer term, I suspect this is all a reflection of a fundamental shift away from the S&P 500/large cap US Growth stocks and a broadening out to other groups, foreign markets and stocks.

Guest

6:19

MLP's getting hit hard today, especially EPD and ET. Any insight as to why and is this an opportunity to add to my positions?

Roger Conrad

6:19

The MLPs we recommend are strong buys when they sell for less than our recommended entry points/buy prices. We do not advise adding to positions when they sell for higher prices.

Energy stocks in general are getting hit today with the Energy SPDR (XLE) off -1.1% at the close. That's to be expected these days when oil prices fall, as they did today.

The rumor de jour is that Operation Epic Fury "may end soon" and the Strait of Hormuz reopen. There's no way of knowing if that will happen. But this is why we've banked some gains lately and why we've been so adamant about not chasing stocks--even of our favorite companies.

There's a long-term energy upcycle on. Epic Fury fallout will likely wind up extending it. But near-term, stock prices will be volatile. And windfall gains due to geopolitics have a nasty habit of vanishing overnight.

Elliott Gue

6:20

By the way, I originally published my note about the 200-day moving average for my Elliott's Options trading service readers on Friday afternoon. However, I decided to republish it on my Substack today here for anyone that's interested "The 200-day Line in the Sand."

Gary Simmons

6:22

Yes, please write more about agriculture commodities. The Hackett Newsletter have identified a major bull market into 2028 and then into 2032 based upon the convergence long lasting (long wave) weather patterns plus the 100% correlation to higher agriculture commodities and War Cycles. I believe this sector is a safe longterm cycle in motion for a few years.

Elliott Gue

6:22

OK, I will try to do that over on Substack. We actually just had a major release from USDA today -- the Prospective Plantings Report -- which has some implications for the corn/soybean/wheat markets.

Roger Conrad

6:23

Helping investors navigate what's happening now is a real value add we provide in Energy and Income Advisor. This is the last time I'll say it on this chat. But anyone who has questions like these who doesn't get it really should take us up on the 30 day, free trial.

Sal P

6:29

Afternoon Gentlemen I was wondering if you had any thoughts on Oneok . As i still have all the shares received from the Magellan acquisition. Thanks

Roger Conrad

6:29

Hi Sal. I think you continue to stick with ONEOK--as we have also done in the EIA Model Portfolio since the Magellan merger. MMP was one of a series of deals this company has done in recent years to scale up and boost its presence in prime shale areas. And we've seen the results in faster growth of cash flows and dividends. It's hard to believe OKE slipped as far as the low 60s late last year, as investors worried about a repeat of 2015. But this is a much different company now with far less commodity price exposure as well as risk to a drop in Bakken production. The current price near 90 is too high to take new positions. And 100 would be a good point to take a partial profit. But OKE is a solid company with a lot of long time upside as this energy upcycle continues.

Hans

6:32

Roger: TU they pay dividends tomorrow, the stock has not moved much this year, is it perhaps time to look for something else. Thanks

Roger Conrad

6:32

Hi Hans. Telus has for sure been a disappointing stock. And as I answered in a previous question in the chat, as cheap as they are, shares still face headwinds from Canadian dollar weakness since the launch of Operation Epic Fury, as well as the fact that Canada has four national telecom competitors--rather than the optimal three to stabilize margins and encourage investment. I don't think that will last forever. And from all indications, Telus' debt reduction plans are on track. But it does mean if you're going to own Telus, you're likely going to have to be patient.

Roy

6:36

Hi Roger, thanks for your long-running recommendation of KMI, which I hold in an IRA. If I were to take some profits and reinvest them in ET, my understanding is that the resulting K-1 forms would be for information only and would not affect my personal tax returns. Is that your understanding?

Roger Conrad

6:36

Hi Roy. This is kind of grey area. But I can say I've had modest holdings of MLPs in a tax deferred account for several years without any additional filing requirements or tax consequences.

The rule of thumb is still that as long as your account wide MLPs don't generate $1,000 of unrelated business taxable income (UBTI), there should be nothing extra to file or pay. And you really have to get a lot of UBTI to get to $1,000--most MLPs generate none or else very little.

Elliott Gue

6:41

E-mail Question:
I very much appreciate your view on LNG. Do you think the Cheniere and VG are already pricing in this expanded capacity and is it too late to invest? Same question for the gas producers like EQT, EXE and AR. On an oil topic, what are your thoughts on the impact of the Gulf States shut in of oil and the ability for them to resume production after the crisis is over? Will they be able to come back to their prior production rates quickly? What will be the impact to flood of crude in floating storage on oil price and E&P company stock price? Assuming near term price drop is in order and with your gas thesis, should we sell oil and rotate into gas near term?

Answer: Thanks for the question. Venture Global is an aggressive recommendation and it has recently popped above our buy under price. However, I really think their modular LNG construction methodology is shining right now. Because they’re able to build facilities so quickly and get them up and running, I think VG will see superior growth prospects in coming years as it builds out to help fill the gaping hole left by the loss of Qatari volumes.
I think there’s a growing realization of this in markets. As you may recall, the big story for VG last year was that they had a number of outstanding arbitrations against them related to the sale of spot LNG cargoes from CP1 before the facility was fully completed. They prevailed against Shell and then Shell tried to overturn their loss in NY State Supreme Court (Shell lost again and now has to pay court costs), they lost against BP and they settled for an immaterial sum with a Chinese LNG buyer.

Now, this year, VG prevailed against Repsol, won against Shell in New York, and just last week settled with Edison (the Italians).
Here’s the way I see that – why were the Chinese so quick to settle? Well, I suspect it’s because they wanted to preserve the relationship and to make sure they can get more LNG from VG in future. Last week, when Edison settled basically it appears that Edison is getting additional LNG spot cargoes as their settlement (more gas, which Europe desperately needs). I also suspect, like the Chinese before them, Edison wants to make sure they can get access to gas from future VG projects.
In short, last year when gas prices were low, and European gas storage looked healthy, they European producers were pushing for damages while the Chinese took the longer-term strategic view. Now Edison followed them and I suspect we may see the other two arbitrations against VG also settle – Orlen of Poland being one.

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