Forecast / Valuation Updates - May 27
Posted: Mon May 27, 2019 10:05 am
All of the forecast / valuation models (Excel spreadsheets) for the Sweet 16 and the Small-Cap Growth Portfolio companies have now been updated for Q1 results and fresh production guidance from each company. Q1 results were "good" and Q2 results are going to be better. Unless you believe the price of oil is going back under $50/bbl, these stocks are grossly oversold.
A common theme is that each company is at or moving quickly to covering all capex with cash flow from operations. Several companies have started paying dividends and/or have aggressive stock repurchase plans underway.
Permian Basin natural gas and NGL prices are likely to remain depressed through year-end because of limited pipeline takeaway capacity. The situation is worse in the Delaware Basin than it is in the Midland Basin or CBP.
Four of the midstream companies in our High Yield Income Portfolio have increased their quarterly distributions (MMP, MPLX, OKE and PAA). The average annual dividend yield for the portfolio is 7.2% and most of them are tax deferred.
A common theme is that each company is at or moving quickly to covering all capex with cash flow from operations. Several companies have started paying dividends and/or have aggressive stock repurchase plans underway.
Permian Basin natural gas and NGL prices are likely to remain depressed through year-end because of limited pipeline takeaway capacity. The situation is worse in the Delaware Basin than it is in the Midland Basin or CBP.
Four of the midstream companies in our High Yield Income Portfolio have increased their quarterly distributions (MMP, MPLX, OKE and PAA). The average annual dividend yield for the portfolio is 7.2% and most of them are tax deferred.