Energy Bets

[anitya]

I would like to get a better understanding of the investible universe of this hugely important sector: both traditional and alternative Energy investments.  The goal of this thread is to make money and would appreciate ideas for the short term (1-2 years) and the long term (5 yr) investments.    I would prefer no personal political biases in the discussion.  (If it would help, pretend as if you are getting paid based on the outcomes of your views.) 

I noticed chang bought today -  TTE at $50. Yielding 5.4%!


chang ,

If you readily have info / guesses re TTE on the following, please share:


How much of this company is owned by the Government, employees, etc.



Are employees unionized?



How are the company's capital commitments to invest in renewables vs in traditional sources of energy?   Checking for effect on profits.  I noticed that it maintained dividend amount more or less the same for some years but its June 16, 2022 dividend was dropped (slightly) to a 2016 level.  (BP on the other hand had slashed div in 2020 and kept it at that level.)


Norbert , With your deep personal knowledge of this sector, I would appreciate you sharing your knowledge and your participation in this thread.

Unfortunately, I am not aware of anybody else at Big Bang with Energy industry experience - we had a few of them at M* discuss.

xray had this post today that appeared relevant (I am yet to read) - big-bang-investors.proboards.com/post/21484  I own some midstream assets via FIF and other energy assets through Berkshire stock. 

Edit: As an aside, I also own small holdings in MMP (midstream), NRGX (PIMCO CEF), CVX, & EQNR, after reducing the size to preserve capital because these are Covid low purchases on a whim without much research into the sector.   I probably should sell all and start fresh after a deep dive into the sector. 

Thanks.

[uncleharley]

My energy bet remains with KMI. I like it for the potential that its LNG facility near Savanah, Ga gives it. I like it for its divvy [6.8%]. I like it for its large insider ownership. And I like it for its technical position on its daily chart.

[anitya]

Thanks, uncleharley .

Any specific reason you invested in a Midstream company and not also in other aspects of energy?  

FYI - I added an Edit to my OP.

[chang]

I wish I had more insight ... TTE popped up on my radar a few months ago based on chart, valuation, yield, and the fact that I wanted an energy stock. I bought at $50 then (same price as today); it dropped to $47, then rapidly ran up to $62. Volatility no surprise, I guess. I plan to hold forever (as always, though it doesn't always turn out that way) for the income.

Also, there's a local angle: Total, Cepsa and BP are the only gas stations in my area. I wouldn't touch the other two, so now I feel "good" (not exactly) filling up at Total stations, pretending I own them.

[fishingrod]

I may not help much, but I found the energy space too volatile for me.

I invested in VDE Vanguard energy ETF. I had wanted it to be an inflation hedge long term and something to compound over time. As soon

as I bought it, it went down by 58%. I held firm, in fact I bought more, and like all those who try to catch falling knives, I was

bleeding. I did lower my cost basis. But I felt humbled. I reinvested everything. Time passed.

Enter 2021, VDE went up by 56% . I was happy. I had regained what I had lost and due to compounding and buying more at really low

prices I was a good bit above water. Enter 2022, I gained another 58% really quickly. I had learned my risk tolerance and was ready to

move on and take my profits. Since I have sold my entire holding less than a month ago the VDE fund is down over 20%. I am not a heavy

risk taker or trader. I found the energy sector way too volatile for me.

[Deleted]

TTE is a value stock with a great dividend. It has more risk than most with Russia. Which is why I have stayed away from it. I very nearly bought it, but opted for Shell - see below.

I have owned CVX through thick and thin - over a decade. I trimmed after it appeared to me to be overvalued. If it drops in the low 130s, I will accumulate. It's a keeper for me. Rock solid dividend payer.

OXY - wow - what a roller coaster. I bought it at its high and have held for years. With some good tax moves, recovery, dividends before cut, warrants issued, I am a little ahead. Not great, but not a tragedy. It's being well run now.

CTRA - natural gas mainly with fabulous assets and a rock solid balance sheet. With the variable dividend it's been paying around 8%. I intend it to be a long term hold. It is very volatile. Fell 23% last week. You need a strong stomach.

I still have EPD, ENB, and MMP. I kind of want to add to EPD, but have my share of scars from the MLP and oil melt down. No reason for me to sell and ahead on all - great distributions.

That leaves Shell - good price right now for a long term hold. International. Not as good a dividend as TTE.

As fishingrod mentioned - very volatile sector. I recommend diversifying if you venture there.

Personally - I like energy. I have lived through its cycles since the 70s. It is up and down. No consumer staple stability here. I have had very large losses - KMI being one of them. I think I have culled the worse as this point and like my survivors. My new players - CTRA and SHEL - are on probation. We could be in a new oil & gas super cycle. Lots of arguments for and against.

[alvinthechipmunk]

Yes, from day to day, it's a loser's game, predicting precisely what will happen. I'm now 10.5% of portfolio in Energy, according to Morningstar X-Ray. ET is my biggest chunk, but still just 2.88% of total portfolio. It's fallen, the past few days. As an LP, it's a K-1 investment. That's a bug-a-boo for some. It was recommended here. I wish I could remember just who to thank! My position is just a couple of months old, anyhow. Since it is midstream, it does not have well-drilling and production overhead costs----- unless I'm just utterly wrong about that. It's geographically spread out, too. Not just in Permian.

At the moment, I'm thinking I'd like to invest in a company that will create a fix for the neighbors' overdone, overblown, toxic, artificial, industrial-strength "fresh" laundry smells from their detergent or drier sheets. HEADACHE CITY. LITERALLY. Like I asserted elsewhere: I do NOT belong on this planet.

[mnfish]

FYI In regard to TTE which I hold in a taxable acct and foreign taxes -
04/12/2022 Withholding TTE FRGN-W/H @ SOURCE TOTALENERGIES SE ADR -$37.28
04/12/2022 Charge TTE TOTALENERGIES SE 400 -$7.20
04/12/2022 Dividend TTE TOTALENERGIES SE ADR 041222 400 $291.26

[mnfish]

Wells Advisors says to look for flatter energy returns for the remainder of 2022 as demand slows and then re-accelerating in 2023 with supply constraints again.

They prefer high quality Mid-stream C Corps.

[chang]

Justy saw this in an e-mail from Fidelity:

www.fidelity.com/learning-center/trading-investing/markets-sectors/new-stock-ideas-2022?ccsource=email_weekly_AT

Excerpt below:

---

There are a variety of valuation screening criteria that you might consider to search the market using the Fidelity.com screener. These include, but are not limited to, price multiples like P/E and price-to-book (P/B). Here are the top 10 results, as of June 23, 2022, for a screen of medium- and large-cap stocks ($6.5 billion and above) with a low P/E ratio (11.27 and below), low P/E growth ratio (1.42 and below), and low P/B ratio (1.31 and below), sorted by market cap:

Toyota Motor ( TM )
Wells Fargo ( WFC )
TotalEnergies ( TTE )
Micron Technology ( MU )
BNP Paribas ( BNPQY )
UBS Group ( UBS )
Ford Motor ( F )
ENI SPA ( E )
American International Group ( AIG )
State Street ( STT )

[uncleharley]

Jun 23, 2022 21:15:02 GMT anitya said:

Thanks, uncleharley .

Any specific reason you invested in a Midstream company and not also in other aspects of energy?  

FYI - I added an Edit to my OP.

I would be more comfortable shorting much of the energy sector at this time.

[Deleted]

UH - why?

I understand there has been a huge runup, but valuations for many look quite reasonable. Is your thought based on T/A?

[uncleharley]

Jun 24, 2022 17:21:45 GMT @slooow said:

UH - why?

I understand there has been a huge runup, but valuations for many look quite reasonable. Is your thought based on T/A?

Most of my attitude toward the industry is based on the thought that much or most of the industry is involved in products and processes that are mature and need to be replaced.  The newer or cleaner products and processes do not seem to be sorted out at this time.  I also run a concentrated portfolio so I do not need alot of positions to be comfortable.

[anitya]

www.youtube.com/watch?v=rl-uOaoDOJc

CNBC interview with Kyle Bass. He usually has good points but strong views - so, put your own filters. Monetary policy & current markets starts at around 10 minute mark and Energy discussion starts around 13.5 minute mark. 

[bizman]

Jun 25, 2022 17:02:07 GMT anitya said:

www.youtube.com/watch?v=rl-uOaoDOJc

CNBC interview with Kyle Bass. He usually has good points but strong views - so, put your own filters. Monetary policy & current markets starts at around 10 minute mark and Energy discussion starts around 13.5 minute mark. 

Excellent interview.  Thanks anitya,!

[Deleted]

Anitya - thank you for the link!

[anitya]

Hopefully, you guys use your own filters when taking in info from TV / media.  E.g., I do not agree with Kyle’s thought that China going to war with Taiwan is imminent. I think the current increased China rhetoric and incursions into Taiwan airspace is to distract Chinese people from the current Chinese govt failures. We will have a better idea for the direction of the CCP after the CCP Congress in Nov. Also, China is not connected by land to Taiwan and it is not so easy to occupy by force. China can try to destroy Taiwan infrastructure and cities using missiles but that will be counterproductive if the goal is unification. Russia is not looking for unification; it is looking for subjugation of Ukraine. I do not think they are the right comparison.

At the same time, I agree with Kyle’s comment that if public policy is left to WallStreet, we all will be speaking Chinese.  

[anitya]

Jun 27, 2022 2:24:18 GMT bizman said:

Jun 26, 2022 19:21:22 GMT anitya said:

Hopefully, you guys use your own filters when taking in info from TV / media.  E.g., I do not agree with Kyle’s thought that China going to war with Taiwan is imminent. I think the current increased China rhetoric and incursions into Taiwan airspace is to distract Chinese people from the current Chinese govt failures. We will have a better idea for the direction of the CCP after the CCP Congress in Nov. Also, China is not connected by land to Taiwan and it is not so easy to occupy by force. China can try to destroy Taiwan infrastructure and cities using missiles but that will be counterproductive if the goal is unification. Russia is not looking for unification; it is looking for subjugation of Ukraine. I do not think they are the right comparison.

At the same time, I agree with Kyle’s comment that if public policy is left to WallStreet, we all will be speaking Chinese.  

I certainly hope your benign read on China is correct.  I have doubts about that.  But I would love to be proven wrong.  

I helped my ex-employer, an S&P 500 component, exit their direct to China market strategy and close their China subsidiary in 2018, much before the rest of the US was having second thoughts about their China relationship.  I do not have to be benign or adversarial towards anything or anyone, just need to be practical.  If something is not my domain, I talk to the experts, recognizing that they are human and have biases.  You talk to three different guys in military intelligence, you get three different views.  I do not mind the extra work necessary to reach a conclusion on matters important to me.  This thread is not about China.  I used Kyle's comments about China to illustrate how one can agree with a part of it, while disagreeing with the other part - it does not have to be all or nothing.  It would be good to leave China discussion to another thread.

[bizman]

Apologies for going off topic.  My comment above has been deleted.

[Deleted]

Anitya - as x-ray says - just one opinion of many....I don't use these links for decisions. Just interesting.

[anitya]

Jun 27, 2022 10:28:56 GMT bizman said:

Apologies for going off topic.  My comment above has been deleted.

No worries.  If it is OK with you, I am going to leave my reply (and your comment which I quoted) in the thread just as a reference for the thread.  Thanks.

[chang]

Reviving this thread in view of a recent projection (sorry I forgot the source) that oil is headed to $125/bbl.

I established positions in Total, Shell, and Equinor in the last three months. They’ve been volatile, but actually they’re my best performers YTD, and they have juicy dividends. I am thinking of doubling my Shell holding. (Oil fell quite a bit yesterday; if it continues today, then today might be the day to buy.)

I don’t really like to own stocks (which are intended to be “hold forever”) that are closely correlated to a commodity price. However, they do throw off a hefty yield, which makes all the difference in my mental equation. Unlike tobacco, I don’t think fossil fuels are going to disappear.

Curious whether oil / energy stocks are a buy, hold, or sell for anyone else.

As a PS, I read a few days ago that Buffett is still buying oil stocks (sorry again, I don’t remember the source).

[uncleharley]

My daily chart for the price of WTIC indicates that oil has formed a significant bottom and is probably moving up from here. A projection to $125 per barrel seems a bit too much, but we just never know. Meanwhile, expecting oil to remain in a trading range from about $87 to about $97 seems to be a more realistic call.

stockcharts.com/h-sc/ui?s=$WTIC&p=D&b=3&g=0&id=p82745051956&a=412512425&listNum=86   

EDIT;  OOPS!!!!  Pre-market trading indicates that significant bottom is not holding.   Disregard my post.  I don't know nuthin.

[retiredat48]

uncleharley ,...who posted: "EDIT; OOPS!!!! Pre-market trading indicates that significant bottom is not holding. Disregard my post. I don't know nuthin."

Will do! And I will add your last sentence to my library...

R48

[richardsok]

It occurs to me that gas station and convenience stores might be the wrong place to put electric charging stations. Wouldn't they be better sited in places where people expect to spend a decent amount of time? No one wants to cool his heels for an hour at some dreary 7-11 or Exxon station.

Why not put EV charging stations outside supermarkets, Walmarts or Red Lobsters restaurants -- places where people generally INTEND to spend 45 minutes minimum?

[Chahta]

Sept 7, 2022 15:22:12 GMT richardsok said:

It occurs to me that gas station and convenience stores might be the wrong place to put electric charging stations. Wouldn't they be better sited in places where people expect to spend a decent amount of time? No one wants to cool his heels for an hour at some dreary 7-11 or Exxon station.

Why not put EV charging stations outside supermarkets, Walmarts or Red Lobsters restaurants -- places where people generally INTEND to spend 45 minutes minimum?

There are already free chargers at grocery stores etc. I am waiting for free gas pumps next to them.

[Norbert]

I noticed these chargers like this one installed along the street in London last week.  When not in use, they're pushed down to sidewalk level.

[FD1000]

HDV is an index that is doing well YTD based on VALUE + has about 19-20% in energy. I, and others, posted about it months ago.
KISS is usually my choice.

Attachments:

[liftlock]

Sept 7, 2022 7:22:10 GMT chang said:

Reviving this thread in view of a recent projection (sorry I forgot the source) that oil is headed to $125/bbl.

I established positions in Total, Shell, and Equinor in the last three months. They’ve been volatile, but actually they’re my best performers YTD, and they have juicy dividends. I am thinking of doubling my Shell holding. (Oil fell quite a bit yesterday; if it continues today, then today might be the day to buy.)

I don’t really like to own stocks (which are intended to be “hold forever”) that are closely correlated to a commodity price. However, they do throw off a hefty yield, which makes all the difference in my mental equation. Unlike tobacco, I don’t think fossil fuels are going to disappear.

Curious whether oil / energy stocks are a buy, hold, or sell for anyone else.

As a PS, I read a few days ago that Buffett is still buying oil stocks (sorry again, I don’t remember the source).

I continue to like the energy sector and have been increasing my allocations to it.   The sector continues to have strong relative strength.

www.etfscreen.com/performance.php

In spite of the recent out-performance, valuations remain compelling.  On Bloomberg radio this morning, Sam Stovall, Chief Investment Strategist at CRFA, indicated that energy stocks are trading at a 50% discount to their historical norms.  Cash flows of the energy stocks are strong and they don't need oil at $125 a barrel to make money.  A recent Barrons article indicated that Exxon would remain profitable at $41 a barrel.  The likelihood of oil going that low seems unlikely to me. 

I suspect the supply and demand balances in energy are likely to remain tight.  Any end to the war in Ukraine isn't likely to cause sanctions to end or more energy to flow out of Russia any time soon.  It wouldn't surprise me if world leaders try to find a way to tax Russian energy to fund repairs to the physical damage Russia has caused in Ukraine.  There may be some reduced energy demand due to global economic slowdown, but I don't think that will be long lived.  Global energy supplies are tight even though many are working from home and driving less than they were before Covid hit.  Some worry that renewables will destroy the demand for fossil fuels but that is likely to be a slow process the global demand for all types of energy seems likely to remain strong.  

ourworldindata.org/worlds-energy-problem
www.eia.gov/outlooks/ieo/introduction/sub-topic-01.php
ourworldindata.org/energy-production-consumption
ourworldindata.org/grapher/energy-consumption-by-source-and-region

I own stock positions in APA, BP, CVX, DVN, HP, OXY, PBR, REPYY, TTE, XOM and ETFs AMLP, MLPX, XOP, and NRGX.  NRGX continues to be one of my favorite closed end funds.  I like the rising price trend, 16% discount to NAV, 6% dividend and the cash flows being generated by the underlying positions.  See attached is a list of fundamental data for selected stocks in the energy sector.    

[chang]

liftlock I see your chart is sorted by P/E from low to high, and pleased that my picks are in the lowest third of P/E (although I didn’t choose them on that basis). Is the yield for PBR correct? If so, isn’t that a bit scary?