The government’s war on coal may be over, but inexpensive natural gas and ongoing declines in the cost of renewable energy continue to drive the retirement of older coal-fired power plants in the US. Savvy investors should ignore the moribund coal industry and focus on energy storage.
Alberta plans to shut down all its coal-fired power plants by 2030, an ambitious target that will be a huge adjustment. This transition creates a massive longer-term opening for a few specific companies.
Volatility in oil prices and minor business bumps have contributed to pullbacks in some of our favorite master limited partnerships (MLPs). These companies’ underlying strengths mean now is a time to buy, not be shy.
US oil production appears to be bottoming, but investors seeking to profit in an environment where prices will likely range between $40 and $60 per barrel must pay attention to basin-specific trends as well as companies’ balance sheets and acreage quality.
After successive waves of indiscriminate selling and buying, the easy money has been made in the MLP space; going forward, investors must have a firm grasp on underlying fundamentals to achieve differentiated returns.
We remain bullish on exploration and production companies with franchise assets, low production costs, strong balance sheets and high-quality management teams; these names stand to take market share in an environment where energy prices struggle to break out of their trading range. But investors need to buy at the right price.
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