XLE

In the News: Conflicting Crude Oil Reports, All Eyes on G20 Summit, HP Battling Through Tariffs, Altria Eyes Crown Juul of E-Cigs

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Let’s take a look at some top stories across the markets, including conflicting reports on the likelihood of a crude oil production cut agreement from OPEC and Russia, implications of the G20 Summit this weekend, HP’s solid fiscal fourth quarter report, and Altria’s potential acquisition of a stake in noted private e-cig maker Juul. By Kris Rosemann Volatility in the crude oil market (USO) is nothing new, but investors have been whipsawed quite notably of late by a number of conflicting reports that have potentially meaningful implications on the direction of crude oil prices in the near term. Reports that Russia (RSX) was in agreement with Saudi Arabia (KSA) over the need for production cuts provided a boost to the … Read more

In The News: Oil, Housing, and Cryptocurrency

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Let’s take a look at some market-impacting headlines from the morning of November 19, including volatile oil prices, pressure in the housing market, and the sustained decline in Bitcoin. By Kris Rosemann Speculation in the global crude oil market (USO) that Saudi Arabia would be able to lead OPEC and Russia to cut supply appears to have taken a hit as Russian Energy Minister Alexander Novak stated his views that producers need to monitor supply and demand levels in the coming weeks before deciding on a course of action. Saudi-led OPEC is looking to strike a similar production cap agreement to those seen in recent years with the goal of reducing output by 1 million barrels per day to 1.4 … Read more

Plenty of Reasons for Prudence in Today’s Market

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Image shown: SPDR S&P 500 ETF (SPY) share price performance since early 2016. Source: TradingView.  Market volatility looks to be here to stay. Let’s take a look at some of the recent developments that have market observers concerned. Let’s also dissect recent commentary from Fed Chairman Jerome Powell. By Kris Rosemann Volatility in US equities (SPY) is back in a notable way and is not likely to disappear anytime soon. Market participants continue to weigh the pros and cons of a number of factors, including 1) rising interest rates and their impact on asset prices, 2) the massive corporate debt loads found across the landscape (global debt to GDP ratios are at all-time highs), 3) a seemingly strong and steady US economy, … Read more

Encana Adds Attractive Assets with Purchase of Newfield Exploration

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Image Source: Encana third-quarter presentation Encana already holds a nice presence in some of the most attractive oil-producing regions in North America, and its merger agreement with Newfield Exploration should only add to its appealing portfolio of unconventional plays. By Callum Turcan Encana Corporation (ECA) is a growing upstream oil & gas producer with operations in Canada and the United States. The firm’s two biggest targets in Canada are the Duvernay and Montney shale plays, and in the US, Encana is primarily focused on developing the Permian Basin and Eagle Ford plays. What all four of these regions have in common is they yield wells with a high-liquids production mix, allowing Encana to directly capitalize on the uneven and wobbly … Read more

In The News: Oil Price Slump Continues, GE Cutting Baker Hughes Stake, and Home Depot’s Outlook

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Let’s take a look at some of the top stories from around the markets, including a number of energy-related headlines and what Home Depot sees in its near-term outlook. By Kris Rosemann Crude oil prices (USO) continue their recent slide as oversupply fears creep back into the fore. OPEC recently cut its forecast for 2019 global oil demand growth for the fourth consecutive month, and the cartel expects supply growth from non-OPEC countries to exceed demand growth in the year. OPEC noted that its expectations for oil demand growth to slow relative to prior forecasts goes hand in hand with recent downward revision in the IMF’s recent reduction in global economic growth estimates. President Trump continues to target Saudi Arabia … Read more

Upstream Oil Major On the Upswing

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Image Source: Author’s Calculations and SEC Filings ConocoPhillips appears poised to grow its dividend thanks to a materially healthier balance sheet and an improving free cash flow profile. Volatile energy resource pricing will always be a long-term risk to the payout, but the near term looks bright for the upstream oil major. By Callum Turcan ConocoPhillips (COP) may present a strong dividend growth opportunity as it appears set to build upon its current 1.8% dividend yield. First, let’s cover exactly what forced the company to cut its dividend a few years back, and then dig into the potential drivers for dividend growth in the coming years. ConocoPhillips spun-off its downstream division and a large part of its midstream operations from … Read more

Best Ideas Newsletter Portfolio Not Bad Thus Far in 2018

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Part of what we take pride in at Valuentum is telling things how they are. If things are going great, we let you know. If things aren’t going as good as they could be, we don’t hold back. In the year of crypto and cannabis, 2018 hasn’t been the best year for the simulated Best Ideas Newsletter portfolio, but it hasn’t been bad either.  By Brian Nelson, CFA We wrote up an extensive piece on the background of the simulated Best Ideas Newsletter portfolio earlier this year, and we encourage everyone to have a read of that here (pdf). We made some changes to the goals of the newsletter portfolio prior to the beginning of this year. For starters, we … Read more

Update on 5 Top Energy Stocks: KMI, ETP, EPD, MMP, XOM

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We generally like the diversification provided in the Energy Select SPDR ETF (XLE) as one way to consider exposure to the energy resource arena, but let’s get the highlights on some of the most-viewed energy-related ideas on our website: Kinder Morgan, Energy Transfer Partners/Equity, Enterprise Product Partners, Magellan Midstream, and Exxon Mobil. By Kris Rosemann and Brian Nelson, CFA An estimate of intrinsic value is as important as a view that shares of a company are undervalued or overvalued, and we think an application of a fair value estimate range is most helpful. The question, “What is a company worth?”, remains paramount to any investment thesis. The fair value estimate is the outcome of any research and analysis. We’d view … Read more

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