EUROPE’S ENERGY CRISIS IS KEEPING ENERGY PRICES HIGH
America leads the world in oil and gas production. We believe midstream energy infrastructure offers predictable cash flows to investors.
Why Keeping Up With Inflation Isn’t Enough
Cher wanted to turn back time to regain love lost. But economists are always turning back time to adjust prices for inflation, to calculate a measure in today’s dollars. This is to provide a relative price, comparable to current purchases. Although mathematically correct, applied over decades or more it produces a misleading picture of what […]
Why Energy Transfer Can’t Get Respect
If Energy Transfer (ET) was a private company contemplating an IPO, the 15% Distributable Cash Flow (DCF) yield indicated by their underwriters would draw laughter. The bankers would be ushered out of the conference room. Yet that is the lowly valuation investors assign to perhaps the least loved pipeline company in a sector that investors […]
Buffett Finds Value in Shale
Warren Buffett likes the Permian Basin. This was clear from Berkshire’s (BRK) proposed $10BN preferred investment in Occidental (OXY) should they buy Anadarko (APC). Berkshire’s annual shareholder meeting was followed as usual with a Becky Quick interview on CNBC. The 8% dividend on the preferred OXY will issue to finance their acquisition could be inducement […]
Pipeline Earnings Good; Investors Skeptical
We’re in the middle of earnings season, and last week several companies provided 1Q reports. The energy sector continues to struggle to excite investors. Although pipelines stocks delivered very strong performance through March, in recent weeks investors have started to question the rally’s resilience. As a result, sentiment could use a boost from strong earnings. […]
A Reactive Federal Reserve
The other morning a CNBC guest was able to share an insight not normally found on TV. The need for ten-second ideas greatly limits the ability of otherwise intelligent people to share much wisdom. R.J. Gallo, whose Christian names are apparently only initials, trades municipal bonds for Federated Investors. He suggested that rates can rise […]