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Resetting Your Mental Model

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Image Source: affen ajlfe A version of this article was originally published on our website October 6, 2013. Having the right mental model and using the right information can be the reason why you win or lose in investing. “What is the definition of timeliness? Many believe it is getting information to investors as quickly as possible after an event, or updating something every single day or week for immaterial information. I believe in a different definition of timeliness. I believe timeliness is using all information available in a mosaic approach to accurately predict the event before it even happens. Take Kinder Morgan as the latest example. We were the only ones predicting what was going to happen before it did. To investors, … Read more

Apache Comes Up Empty in Suriname, Shares Plummet

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Image Source: Apache Corporation – November 2019 IR Presentation By Callum Turcan On December 2, Apache Corporation (APA) announced that its first exploration well off the coast of Suriname (a small nation in northern South America) was a dud. The Maka Central-1 well was drilled to a total depth of 6,200 meters (~20,300 feet) in Block 58 and drilling activities commenced in late-September. While the well was testing two Upper Cretaceous plays, neither play appeared to have commercial level of hydrocarbons (more information will be provided by management on this issue in the near future) so Apache opted to drill down to a total depth of 6,900 meters (~22,600 feet) to test a third Cretaceous play. This news sent shares … Read more

Energy Earnings Roundup

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Image Source: Exxon Mobil Corporation – First quarter 2019 earnings presentation By Callum Turcan Energy earnings season is upon us and several major oil & gas companies have just reported their first quarter results. Global crude pricing benchmarks tanked during the last three months of 2018 and only partially recovered during the first three months of 2019, which depressed upstream raw energy resource realizations for those with a large liquids production base (meaning those that produce more natural gas liquids, crude oil, and condensate than “dry” natural gas). Chevron Corporation (CVX): The energy giant posted EPS of $1.39 during the first quarter, down from $1.90 in the same period last year. Weaker realized raw energy resource prices offset a 7% … Read more

Chevron Joins the Ranks of Exxon Mobil and Shell After Buying Anadarko

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Image Source: Chevron Corporation – IR presentation Chevron is buying Anadarko. Chevron will have to show that the projected operational synergies and related capital intensity reductions actually materialize through this acquisition, as execution risk is very material in the oil & gas world. We will be monitoring the industry as further consolidation is possible with interest rates remaining low for the time being and in light of oil prices moving sharply higher since January. By Callum Turcan Energy stocks moved upwards last Friday, April 12, on the news that Chevron Corporation (CVX) is purchasing Anadarko Petroleum Corporation (APC) for $33.0 billion in a cash and stock deal, for a total enterprise value of $50.0 billion when taking debt into consideration. … Read more

Three Upstream Companies Contend with the Shale Treadmill

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Image Source: Marathon Oil Corporation — Fourth-quarter IR presentation. Global oil prices are climbing back up again and that got us thinking about three of the biggest independent upstream players in America’s shale patch. By Callum Turcan Global oil prices are rising and that has gotten us thinking about upstream players EOG Resources Inc (EOG), Noble Energy Inc (NBL), and Marathon Oil Corporation (MRO). All three of these companies possess domestic and international producing operations, with unconventional upstream opportunities in America providing a key growth generator as market conditions allow. Stronger realizations will lead to improving financial performance on a sequential basis, but ultimately, valuations are based on price expectations over decades not quarters. This generally makes valuing upstream firms … Read more

Why We’re Staying Away from KLX Energy Services for Now

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Image Source: KLX Energy Services By Callum Turcan KLX Energy Services Holdings Inc (KLXE) is the product of a major corporate restructuring, as the oilfield services side of KLX was spun-off to shareholders while the aerospace business was acquired outright by Boeing Company (BA) in an all-cash deal worth $4.25 billion (including the assumption of $1.0 billion in debt) last year. Going forward, the new KLX Energy Services is focused on providing well completion, well intervention, and drilling services to America’s upstream oil & gas industry. A key consideration is that as a more focused enterprise, KLX Energy Services should be able to better perform in a tough space to be in right now. Note that the company does not … Read more

Valuentum Stock Screeners

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This article was sent to members via email December 29. That email can be accessed at the link that follows this article. By Brian Nelson, CFA Hi everyone, I wanted to provide an update with respect to Valuentum’s stock screeners. We believe our stock screeners are among the most robust when it comes to providing forward-looking data, or data that is important with respect to the investment decision-making process. We publish screens in each of the monthly newsletters, but we also provide a basic weekly screener for download on the left column of the website, “Download Weekly Stock Screener (xls) — login required.”   We also have other products. The more robust DataScreener, for example, is part of the quarterly Financial … Read more

Market Mayhem — Alerts for Members

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During these extremely volatile times, it’s important to stay focused. On December 15, we informed all of our members to “Pay Attention.” Shortly thereafter, we notified members of the potential for a stock market technical breakdown. This morning, we offered a pre-market briefing about the importance of thinking about portfolio protection. For Best Ideas Newsletter and Dividend Growth Newsletter members: http://campaign.r20.constantcontact.com/render?preview=true&m=1110817109903&ca=e2406cd6-c113-4344-8731-493f33fc44a4&id=preview For High Yield Dividend Newsletter members: http://campaign.r20.constantcontact.com/render?preview=true&m=1110817109903&ca=b3ba530f-38b3-489a-ac96-2961dca89c6b&id=preview For Exclusive members: http://campaign.r20.constantcontact.com/render?preview=true&m=1110817109903&ca=ba6d90c0-4433-48b2-9b8a-aac4ddf9006e&id=preview We’re here for any questions. Please just let us know how we can help! Kind regards, Brian Nelson, CFA  brian@valuentum.com

ETF Analysis: Energy

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The Inflating Index Fund Bubble

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Image Source: Mac.Else von Berlin The investment industry is changing fast, and we’re happy to be an instrument for change. We’ve been clamoring to make index funds free for a long time, and we’re glad to see it finally happen. Let’s cover the implications of indiscriminate buying regardless of price with the observation that the number of publicly-traded companies is vastly shrinking. How long will the inflating index fund bubble last? By Brian Nelson, CFA Those that know Valuentum know that we stand up for the individual investor, and we work our tails off to make sure that we get the individual investor the very best of information and informed judgment. The CFA Institute via its Enterprising blog showcases a … Read more